In a new video, senior leaders from four financial services firms, together employing over half a million staff, talk about their experiences of adopting the Senior Managers and Certification Regime (SM&CR).

The SM&CR aims to increase individual accountability within financial services and is a key step to improve culture and governance in the sector. It was first adopted by the banking sector in 2016 and by insurers in December 2018.

The Financial Conduct Authority will be extending the SM&CR to around 47,000 solo-regulated firms in December 2019. The extension of the SM&CR will ensure that all staff and the regulators understand who is responsible for what in a firm. It will also ensure that firms’ governance arrangements are transparent.

In the video, Dame Jayne-Anne Gadhia, former Chief Executive, Virgin Money, Jon Symonds, Deputy Group Chairman, HSBC, Liz Nolan, Chief Executive Officer of EMEA, State Street, and Vis Raghavan, Chief Executive Officer of EMEA, J.P. Morgan, talk about how the SM&CR has helped improve culture and governance in their organisations and give advice to the firms that will be adopting the SM&CR in 2019.

Dame Jayne-Anne Gadhia, former Chief Executive, Virgin Money, describes the SM&CR as effectively

‘structuring the way in which boards and senior managers should have been behaving all along’. She adds: ‘I think it’s really important to understand the essence of the Senior Managers Regime, which isn’t trying to trip us up, it isn’t trying to end up with everyone in prison – it’s actually to make sure that everybody does understand what’s asked of them, does understand the job that they’re supposed to do and can deliver on it to the best of their ability’.

Jon Symonds, Deputy Group Chairman, HSBC, describes the SM&CR as

‘a clear framework that is relatively simply defined on pretty much one page per person that really defines how the organisation knits together‘.

Liz Nolan, Chief Executive Officer of EMEA, State Street, says the SM&CR has

‘helped us to drive better individual accountability through transparency, clarity and support‘.

Vis Raghavan, Chief Executive Officer of EMEA, J.P. Morgan, says:

‘The one key piece [of advice] which I would absolutely leave with somebody else who is adopting it is – this has got to be owned and led by the business, so you cannot delegate it to HR or compliance or any other kind of function‘.

Source: FCA

Background

  1. Video: banking leaders’ experiences of adopting the SM&CR
  2. The culture and governance of firms is an ongoing priority for the FCA and a key part of the FCA’s work in this area is the extension of the SM&CR to most of the firms they regulate.
  3. Guide to the SM&CR for solo-regulated firms