Published: 28th February 2018


Of relevance to: All FCA-regulated firms not currently within the Senior Managers & Certification Regime
Key date: Summer 2018

The Financial Conduct Authority (“FCA”) and the Prudential Regulation Authority (“PRA”) currently maintain a public Financial Services Register (“the FS Register”) of the firms they regulate and the individuals they have approved.

In July 2017, the FCA published proposals to extend the Senior Managers & Certification Regime (SM&CR) to almost all regulated firms.

Under these proposals, the FCA will only approve the most senior individuals within firms and, as a consequence, only Senior Managers will appear on the FS Register.

The FCA has created three new classifications of firms: ‘Enhanced Firms’ which, will be subject to requirements more akin to the banking SM&CR rules; ‘Core Firms’ (the majority) who will be subject to baseline requirements, and firms who already have exemptions under the Approved Persons Regime will be  ‘Limited Scope Firms’.

All firms will continue to be responsible for assessing the fitness and propriety of their employees and ‘certifying’ certain individuals who are not Senior Managers, but whose jobs mean they can still have a significant impact on customers, firms and market integrity.

However, the new rules would mean that individuals holding the controlled functions CF10A (CASS operational oversight function) for Core and Limited Scope firms, CF28 (Systems and Controls Function), CF29 (Significant Management Function), and CF30 (Customer Function) would not appear on the FS Register once the new SM&CR is implemented.

In response to these proposals, the FCA received substantial feedback on the public value of the FCA maintaining a central public record of certification employees and other important individuals in firms regulated by the FCA, including non-executive directors, financial advisers, traders and portfolio managers.

As a result of this feedback, the FCA will consult by summer 2018 on policy proposals to address this feedback.

In addition, the FCA plans to issue an update ‘shortly’ on its work to improve the usability of the FS Register, which incorporates feedback from the Work and Pensions Select Committee.

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