Preparing for the FCA's Senior Managers & Certification Regime (SM&CR)

The FCA has published its finalised guidance on statements of responsibilities (SoRs) and responsibilities maps for FCA firms under the senior managers and certification regime (SM&CR), which will be extended to all FCA authorised firms on 9 December 2019.

Under the extension of SM&CR, all senior managers of FCA-regulated firms are required to have an SoR setting out their responsibilities and certain firms must have a responsibilities map showing how their firm is managed and governed.

The guidance explains the purpose of the SoRs and responsibilities maps, questions for firms to ask themselves, and examples of good and poor practices. 

Firms will also likely need some additional clauses in their employment/directors’ services contracts for senior managers. 

Time To Get Excited About... The SM&CR!

The FCA has produced a webpage to explain the extension of the "Senior Managers and Certification Regime" (SM&CR) from banks etc. to all FCA-regulated firms from 9 December 2019. 

The SM&CR replaces the "Approved Persons Regime" because it's a bit embarrassing that no senior managers went to jail for their part in the financial crisis and the FCA needed to show that was just because they needed new powers  it lacked 'teeth'.

There's even a video 'explaining it' in full corporate jargon for those who want to sound really important when talking about SM&CR but not actually say anything meaningful about it. 

You can work out the type of firm yours is and how SM&CR will affect you using a marvellous "firm checker" decision tree; or a snappy 76 page guide. 

The FCA believes the impact this regime will have is "profound"...

FCA to Regulate All Employees Of Financial Firms

The Financial Conduct Authority is consulting on the extension of its "Senior Managers and Certification Regime" (SM&CR) to all firms that are regulated by the FCA under the Financial Services and Markets Act 2000 (which excludes e-money/payment institutions, for example, unless they have dual authorisations).

This will replace the "Approved Persons" regime and extend some requirements to all employees. 

Consultation ends on 3 November, and the extension is likely to take effect from early in 2018. 

This means you should study the proposals and begin to plan how to comply, particularly as HR staff/advisers will also need to be involved.