SMCR extended to 47,000 firms – what do you need to know?


INSIGHT
Published
Dec 20th '19
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On 9 December, the Senior Managers and Certification Regime was extended. It now covers 47,000 firms.

 

If your firm is one of these, what do you need to know and what do you need to do?

 

What is the SMCR?

The regulator published its final rules on the extension of the regime in the summer.

 

In its announcement this week, the FCA said that: ‘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 new rules are designed to encourage greater individual accountability and improve 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 5 Conduct Rules
  • enhancing professionalism in the industry by requiring firms to certify that their staff are fit and proper

 

On the day the extension came into force, Jonathan Davidson, Executive Director of Supervision – Retail and Authorisations at the FCA, 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…The SM&CR is an important way to ensure that individuals take personal responsibility and it is a catalyst for driving cultural transformation.”

 

He stressed that compliance with the regime is not just about ‘ticking the box on implementation’ but that firms need to ‘live the spirit of the regime’.

 

How to ensure your firm complies

By now, all solo-regulated firms should have prepared for the incoming regulation by ensuring that:

 

  • 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 have submitted data to the FCA for its directory of key people working in financial services

 

You can also make sure you stay a step ahead of the SMCR and other conduct-based regulations by:

 

  • Embedding a culture of compliance within your firm’s operations and behaviours. This recent blog looks at How to implement a culture of compliance.
  • Ensuring compliance isn’t left entirely to the Compliance team – increased accountability means more than ever that compliance is everyone’s responsibility. Make sure everyone in your firm understands what’s required and plays their part.
  • Keeping up to date on new regulations and following any advice from the regulator on complying with them.

 

Earlier this year, the FCA released a new video where banking leaders share their experiences. The video has useful advice and first-hand experience of implementing the regime.

 

The FCA’s SM&CR Guide for solo-regulated firms and finalised guidance are also helpful as a refresher on what you should now be doing.

 

Make compliance an in-built part of your culture

If you are still getting to grips with the SMCR or any other conduct regulation, you might wish to look for additional support.

 

About us

At LS Consultancy, we offer a complete solution with a range of cost effective, regulatory compliance and marketing products and solutions that are uniquely suited to supporting firms.

 

Explore our full range today.