Published: 12th August 2019

The SM&CR is being extended to FCA solo-regulated firms on 9 December 2019.

The aim of the SM&CR is to reduce harm to consumers and strengthen market integrity by creating a system that enables firms and regulators to hold individuals to account. As part of this, the SM&CR aims to:

  • encourage staff to take personal responsibility for their actions;
  • improve conduct at all levels; and
  • make sure firms and staff clearly understand and can demonstrate who does what.

There are 3 elements that make up the SM&CR:

  • the Senior Managers Regime that focuses regulatory approval on fewer senior individuals in a firm than under the current Approved Persons Regime;
  • the Certification Regime, which requires firms to assess the fitness and propriety of certain individuals who could harm the firm or its customers; and
  • the Conduct Rules, which are high-level standards of behaviour expected of those working in financial services.

What should firms be doing to prepare for SM&CR?

Firms should be reviewing the relevant rules and guidance to ensure compliance with the new regime for 9th December 2019.

Firms need to be identifying Senior Managers, Certification Staff and Ancillary Staff within their organisations, drawing up Statements of Responsibility for Senior Managers and allocating Prescribed Responsibilities. Firms also need to be ready to certify the fitness and propriety of other staff and ensure relevant training on the Conduct Rules is in place. Documentation, including Compliance Manuals, Compliance Monitoring Programmes and relevant polices should also be updated for the new regime.

Complyport has created an SM&CR Project Plan and drafted numerous documents in relation to the SM&CR. Should you need assistance with the implementation of SM&CR, or if you have any queries around it, please get in touch.

Print this Page