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Compliance Advice for the FCA Senior Managers Certification Regime
Need help making SM&CR applications and submissions to the FCA?
Need to understand what SM&CR means for your business?
Does your business need help deciding what SM&CR category it falls under?
Looking for SM&CR training for your employees and senior managers?
Do you need help with Statements of Responsibilities (‘SoRs’) and responsibilities maps?
Need to identify certified individuals within your firm?
Need help with fit and proper checks for certified roles and SMF holders?
Want help designing and implementing SM&CR policy and procedures for your business?
The Senior Managers and Certification Regime (SM&CR) replaced the Approved Persons Regime,
changing how people working in financial services are regulated.
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Successfully guiding you through the regulatory process with a dedicated team of experienced compliance consultants
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Compliance Advice for the FCA Senior Managers and
Certification Regime
The Senior Managers and Certification Regime, more commonly referred to as ‘SM&CR’, was extended to all firms in December 2019. SM&CR was introduced with the aim of improving effective governance, cultivating healthy cultures within firms and by making individuals more accountable for their actions. SM&CR affects almost all regulated firms, from the very smallest (which includes sole traders and limited permission consumer credit firms) to some of the largest global firms.
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There are effectively three aspects of the SM&CR.
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Conduct Rules
Under SM&CR all staff within a regulated firm are expected to take personal responsibility for their actions and in compliance with five Conduct Rules, which are to:
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Act with integrity
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Act with due care, skill and diligence
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Pay due regard to customer interests and treat them fairly
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Be open and co-operative with regulators
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Observe proper standards of market conduct
There must be clear lines of reporting within firms so that staff understand and can demonstrate where responsibility lies. Firms are expected to train their employees to understand what their responsibilities are so that they can meet the conduct requirements.
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Certification Regime
Certain roles within a firm have the potential to cause significant harm to the firm or customers. A number of these roles were previously approved by the FCA under the Approved Persons Regime or ‘APER’. In implementing the SM&CR the FCA expects firms to certify that these individuals are fit and proper when they start to carry out the role and on an annual basis thereafter. This part of SM&CR is called the ‘Certification Regime’.
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Senior Managers Regime
The most senior people within regulated firms who are performing key roles ‘Senior Management Functions’ (‘SMFs’) have to be approved by the FCA before they can start their role. Performing a SMF role without FCA approval is a criminal offence.
Every SMF must have a Statement of Responsibility (‘SoR’) which sets out clearly what they are responsible and accountable for. For information on FCA approval for SMF holders, please also see our Compliance Advice for FCA Authorisations page.
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SM&CR is an important initiative to build trust in the UK financial services industry. If you need help with understanding your obligations under SM&CR complianceadvice.co.uk can help with:
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SM&CR firm categorisation
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Identifying and certifying employees
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Mapping responsibilities and preparation of Statements of Responsibilities
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FCA SM&CR applications and notifications
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SM&CR training for senior managers, certified individuals and employees
SM&CR holds individuals to account therefore it is important to get it right.
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At complianceadvice.co.uk we’ll help you to get it right first time! Call us today for advice and guidance on all your FCA SM&CR requirements.