Checklists for solo-regulated firms implementing SM&CR.

These checklists bring together information from the SM&CR Guide for solo-regulated firms about what you need to do to implement SM&CR, depending on your firm’s categorisation. Before referring to these checklists, you should check which category your firm belongs in.

The Financial Conduct Authority (FCA) have checklists for:

Enhanced firms

The following is a summary of the relevant checklists and the SM&CR Guide for solo-regulated firms. It is not intended to be exhaustive.

If your firm is in the Enhanced category, check:

  • That your firm and individual details are correct. If any changes need to be made, you will need to use the relevant form on Connect.
  • Whether you need to change any existing approvals, or add new ones, ahead of conversion.
  • Which of your current Approved Persons will no longer be approved (i.e. which Approved Persons Regime (APR) approvals will lapse).
  • Who will be a Senior Manager at your firm.
  • Which additional Senior Management Functions (SMFs) need to be allocated and to whom.
  • That each of your Senior Managers has a Statement of Responsibilities.
  • Whether the Prescribed Responsibilities applicable to your firm have been allocated to the relevant Senior Manager and included in their Statement of Responsibilities.
  • You have trained Senior Managers and certification staff in the Conduct Rules, ensuring that they understand how the rules apply to their roles.

Make sure that:

  • Every activity, business area and management function has been allocated to a Senior Manager under the Overall Responsibility requirement.
  • All Prescribed Responsibilities, including the additional ones for Enhanced firms have been assigned to an appropriate Senior Manager.
  • Appropriate Handover Procedures are in place.

Prepare and submit these documents, using Connect:

  • A Form K notifying the Authority of which currently approved individuals should be converted to a mapped SMF.
  • A Responsibilities Map.
  • A Statement of Responsibilities for each of the firm’s Senior Managers.

Failure to submit these documents to the FCA by the appropriate deadline will mean your firm is in breach of the rules and they may take action.

In relation to the Form K, please note the following:

  • You will be able to locate the Form K on Connect, under the Approved Persons tab.
  • Once you have selected the individuals who will hold SMFs within your Form K, the system will generate forms for Statements of Responsibilities for each individual, which you will need to complete.
  • There is a section in the Form K where you will be able to attach your Management Responsibilities Map. Enhanced firms are required to complete this section before being able to submit the form.
  • Controlled Functions will map in their current state on the Form K. For example, a Controlled Function which hasn’t been approved yet, will map to a Senior Management Function in an ‘applied for’ state.
  • If, after you’ve started drafting your Form K, you make any changes to your existing Controlled Functions (submitting a Form A, B, C, D, E etc), you will need to refresh the Form K you have in draft to ensure the information contained within the form is up to date. If Connect identifies that you have submitted a form which has changed your Approved Persons and you fail to refresh the Form K, an error message will appear on the Form K, prompting you to do so.
  • If, following submission of your Form K, you submit an APR Form A/E, you will need to re-submit your Form K. If you don’t re-submit your Form K, mapping this individual to the corresponding Senior Management Function, the applied for function will fall away at commencement of the new regime.
  • If you submit an SM&CR Form A, applying for an individual to hold a Senior Management Function, this won’t appear on your Form K as no conversion is required.

Form K must be submitted by 23.59 on 24 November 2019 and is available on Connect from 9 September 2019.

Senior Management Functions will appear on the FS Register on 9 December 2019. Therefore, on or shortly after 9 December 2019, you should check the FS Register to ensure you have the correct Senior Management Functions. If you have any questions, you should contact the FCA.

If you have an Approved Persons Regime application in progress – that the Authority hasn’t processed before SM&CR begins – you will need to submit a Statement of Responsibilities for your application by 16 December 2019. You should do this by sending a paper Statement of Responsibilities to your Case Officer (this form will be available in due course).

The Certification Regime and Fitness and Propriety Checks

  • Make sure that you understand which of the Certification Functions apply to your firm.
  • Identify the individuals within your firm that need to be certified on an annual basis.
  • Ensure that the annual fitness and propriety checks for Certification staff and Senior Managers fit into your firm’s existing HR and other processes.

Regulatory References and Criminal Records Checks

  • Assess how the new Criminal Records Checks and Regulatory Reference Requirements fit into your firm’s existing recruitment processes.
  • Ensure that your firm has the appropriate processes to obtain Criminal Records Checks for new Senior Managers and confirm your firm is registered with the DBS, Disclosure Scotland or Access NI (as relevant).
  • Ensure that your firms has the appropriate processes to obtain and provide regulatory references (see pages 40-41 of SM&CR Guide for solo-regulated firms for more information).

Conduct Rules

Make sure that you:

  • Can identify your firm’s ancillary staff (i.e. those to whom the Conduct Rules do not apply).
  • Understand the Conduct Rules training and reporting requirements for Senior Managers and all other staff.
  • Consider how staff will be made aware and trained so that they understand how the conduct rules apply to them in their roles.

Core firms

The following is a summary of the relevant checklists and the SM&CR Guide for solo-regulated firms, it is not intended to be exhaustive.

Identify:

  • Who will be a Senior Manager at your firm.
  • Whether you need to change any existing approvals, or add new ones, ahead of conversion
  • Whether you firm has a Chair. If so, determine whether they are Executive or Non-Executive. If they are a Non-Executive Chair of a governing body you will need to submit a Form K to convert that individual from CF2 (Non-Executive Director) to SMF9 (Chair) under the new regime. Executive Chairs will need to apply for the SMF9 function using Form A.

Make sure that:

  • You understand what you need to do, and which forms are required, to amend your approvals where appropriate.
  • You know which of your current Approved Persons will no longer be approved (i.e. which Approved Persons Regime approvals will lapse).
  • Each of your firm’s Senior Managers has a Statement of Responsibilities.
  • All the Prescribed Responsibilities applicable to your firm have been allocated to the relevant Senior Manager and clearly included in their Statement of Responsibilities.
  • You have trained Senior Managers and certification staff in the Conduct Rules, ensuring that they understand how the rules apply to their roles.

If you have an Approved Persons Regime application in progress – that the Authority hasn’t processed before SM&CR begins – you will need to submit a Statement of Responsibilities for your application by 16 December 2019. You should do this by sending a paper Statement of Responsibilities to your Case Officer (this form will be available in due course).

The Certification Regime and Fitness and Propriety Checks

  • Identify which of the Certification Functions apply to your firm.
  • Identify the individuals within your firm that need to be certified on an annual basis.
  • Ensure that the annual fitness and propriety checks for Certification staff and Senior Managers fit into your firm’s existing HR and other processes.

Regulatory References and Criminal Records Checks

  • Assess how the new Criminal Records Checks and Regulatory Reference Requirements fit into your firm’s existing recruitment processes.
  • Ensure that your firm has in place the appropriate processes to obtain Criminal Records Checks for new Senior Managers and confirm your firm is registered with the DBS, Disclosure Scotland or Access NI (as relevant).
  • Ensure that your firms has the appropriate processes to obtain and provide regulatory references (see page 40-41 of SM&CR Guide for solo-regulated firms for more information).

Conduct Rules

Make sure that you:

  • Identify your firm’s ancillary staff (i.e. those to whom the Conduct Rules do not apply)
  • Understand the Conduct Rules training and reporting requirements for Senior Managers and all other staff.
  • Consider how staff will be made aware and trained so that they understand how the conduct rules apply in their roles.

Limited scope firms

The following is a summary of the relevant checklists and the SM&CR Guide for solo-regulated firms, it is not intended to be exhaustive.

  • Identify who will be a Senior Manager at your firm.
  • Ensure that each of your firm’s Senior Managers has a Statement of Responsibilities.
  • Train any Senior Managers and certification staff in the Conduct Rules, ensuring that they understand how the rules apply to their roles.

If you have an Approved Persons Regime application in progress – that the Authority hasn’t processed before SM&CR begins – you will need to submit a Statement of Responsibilities for your application by 16 December 2019. You should do this by sending a paper Statement of Responsibilities to your Case Officer (this form will be available in due course).

Conduct Rules

Make sure that you:

  • Can identify your firm’s ancillary staff (i.e. those to whom the Conduct Rules do not apply).
  • Understand the Conduct Rules training and reporting requirements for Senior Managers and all other staff.

The Certification Regime and Fitness and Propriety Checks

  • Identify whether any of the Certification Functions apply to your firm.
  • If so, identify the individuals within your firm that need to be certified on an annual basis.
  • Ensure that the annual fitness and propriety checks for Certification staff and Senior Managers fit into your firm’s existing HR and other processes.

Regulatory References and Criminal Records Checks

  • Assess how the new criminal records checks and regulatory reference requirements fit into your firm’s existing recruitment processes.
  • Ensure that your firm has the appropriate processes to obtain criminal records checks for new Senior Managers and confirm your firm is registered with the DBS, Disclosure Scotland or Access NI (as relevant).
  • Ensure that your firms has the appropriate processes to obtain and provide regulatory references (see page 40-41 of SM&CR Guide for solo-regulated firms for more information)

First published: 05/06/2019

Last updated: 11/09/2019

Source: FCA

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