Who’s Responsible? Understanding Responsibilities Under SM&CR

One of the key elements of the Senior Managers and Certification Regime (SM&CR) is ensuring that firms and staff understand and can show who does what within an organisation.

The regime aims to make it clear where responsibility lies in firms and understanding one’s own responsibilities plays a large part of this.

Under the new regime, every Senior Manager needs to have a Statement of Responsibilities (SoR). This is a single document which sets out the individual manager’s role and responsibilities.

It is a legal requirement for Senior Managers to have an up-to-date Statement of Responsibilities.

According to RWA’s research, however, 95% of firms interviewed stated that they had yet to put in place an up-to-date Statement of Responsibilities for each of their Senior Managers. This means that the vast majority of firms interviewed are unprepared for what is required under SM&CR and cannot provide a current, up-to-date account of the responsibilities of their senior managers.

So how should a Statement of Responsibilities be written?

It should be written in a clear and accessible manner, which would be easy for the regulator to understand should they read it. SoRs should be concise documents of about 300 words.  

It is important to stress that a Statement of Responsibilities is not the same as a job description. It should simply list the manager in question’s responsibilities in a factual manner, without any unnecessary detail. A job specification, by comparison, focuses on the skills and competencies required to perform a role. SoRs do not require these details; their purpose is to explain clearly what the individual is accountable for.

A SoR must also be self-contained and not refer to any other documents.

For Core SM&CR firms, a Statement of Responsibilities needs to contain the following sections:

  • Prescribed Responsibilities – detailing each prescribed responsibility held by the Senior Manager (if any). These should be applicable to the firm and appropriate to the role. If prescribed responsibilities are shared with another senior manager, the rationale behind this should be explained here (i.e. “Responsibility shared with X as part of handover process”)
  • Other responsibilities – detailing other responsibilities held be the Senior Manager, including business functions and activities which are not covered by the prescribed responsibilities, in a way that someone unfamiliar with the firm could understand.
  • Supplementary information – detailing additional information (if any).

RWA’s data also suggests that only 35% of Senior Managers within firms had been made aware of their Duty of Responsibility.

Every Senior Manager will have a Duty of Responsibility under FSMA, meaning that if a firm breaches one of the FCA’s requirements, the Senior Manager responsible for that area could be held accountable if they didn’t take reasonable steps to prevent or stop the breach.

Final guidance on how the Duty of Responsibility will be enforced was published in Policy Statement PS/18. However, our research suggests that many Senior Managers remain unaware of their Duty of Responsibility.

With less than two months to go until the implementation of SM&CR on 9th December, it’s important that firms are aware of what they need to do to comply with the new regime. If you need help with SM&CR, please contact helpdesk@rwagroup.co.uk to find out more about our SM&CR Helpline service.

About the author

Lisa joined RWA in 2014 as an e-Learning Assistant, designing training material for the Aviva Development Zone learning platform.

Her role as Professional Standards Manager involves the creation and review of e-learning content as well as providing proofreading, copywriting and standards support across the business.

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