It’s the time year for reflecting on the past twelve months and looking ahead to the new year to come. In the general insurance world, 2019 saw the extension of the Senior Managers and Certification Regime (SM&CR) to FCA solo-regulated firms, replacing the Approved Persons Regime. As such, it has been a year of significant regulatory change.
SM&CR, however, is not something to be left behind in 2019. Rolled out to banking firms in 2016, it is part of what the FCA intends to be a wider cultural transformation across the financial services industry. The aim of SM&CR is to set new, healthy standards of conduct across the sector by increasing personal accountability and encouraging individuals to take responsibility for their actions.
The new regime brings with it changes that will continue to impact firms as we move into 2020 and there will be many considerations for firms going forward. For example, while Senior Managers and Certification Staff should have been trained in, and be abiding by, the Conduct Rules from the start of the new regime, firms must also ensure that all relevant staff are trained on the Conduct Rules and how these apply to their roles. Firms therefore should consider how their relevant staff will be provided with suitable training schemes ahead of 9 December 2020.
We recently published an article which provided a round-up of the regulatory requirements of SM&CR as well as its impact on conduct and organisational culture. Click here to read more.
So, what else can we expect in 2020?
The FCA has been consulting on changes to its guidance on the fair treatment of vulnerable customers. The aim of this is to provide “regulatory clarity for firms involved in the supply of products or services to retail customers who are actually, or are potentially, vulnerable.”
The FCA defines vulnerability as “someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care” and this could potentially include elderly customers, those with disabilities and/or mental health issues, poor literacy and numeracy skills, unstable financial circumstances, carers and those who have experienced a sudden change in circumstances, such as divorce or bereavement. Vulnerability is a complex, but highly important issue so it is essential that firms are aware of and up-to-date with FCA guidance.
A response to the feedback received from this consultation is to be expected in the first half of 2020 and further updates will follow on Insight.
Brexit, of course, is also on the horizon for 2020 after much uncertainty this year. The FCA has pages dedicated to preparing for Brexit, which firms may find useful to keep an eye on.
If you require further help with any of the above, please get in touch with your RWA Business Manager or get in contact via the helpdesk - firstname.lastname@example.org.