The Financial Conduct Authority (FCA) has extended the Senior Managers and Certification Regime (SM&CR) to around 47,000 firms from today, including senior managers and certification staff in those firms. The SM&CR already applies to the banking and insurance sectors and today’s extension is a key step to creating a culture across financial services where individuals step forward and take accountability for their own actions and competence.

The SM&CR encourages greater individual accountability and sets a new standard of personal conduct in financial services by:

  • ensuring senior managers are accountable for conduct in their areas of responsibility
  • ensuring a minimum standard of behaviour for everybody working in the sector through FCA 5 Conduct Rules
  • enhancing professionalism in the industry by requiring firms to certify that their staff are fit and proper

Jonathan Davidson, Executive Director of Supervision – Retail and Authorisations said:

“The culture and governance of firms is a priority for us and should be for industry too. We expect firms to embed healthy cultures as this will lead to better outcomes for consumers and markets. It should lead to a healthy and fulfilling environment for employees in which diversity and inclusion is the norm. It should also lead to healthy and sustainable returns for businesses.

“The SM&CR is an important way to ensure that individuals take personal responsibility and it is a catalyst for driving cultural transformation. It is about the principle of stepping up and taking accountability every day from here on, not just about ticking the box on implementation of the regime.  So today is just the starting point for what firms need to do to live the spirit of the regime.”

By 9 December 2020 solo-regulated firms will need to ensure:

  • all relevant staff are trained on the Conduct Rules and how they apply to their roles
  • all staff in certified roles are fit and proper to perform that role and are issued with a certificate
  • they submit data to us for the directory of key people working in financial services

This will take time so firms should start preparing now.

Further information

  1. Senior Managers and Certification Regime
  2. SM&CR guide for solo-regulated firms
  3. Directory Persons

Source: FCA