SM&CR Extended to FCA Solo-Regulated Firms

On Monday, the Senior Managers and Certification Regime (SM&CR) was extended to FCA solo-regulated firms.

Throughout 2019, we have published various articles covering the practical implications of SM&CR. Here we bring them all together, providing a quick guide to what firms need to know about the new regime.

SM&CR brings multiple new regulatory requirements for firms to consider, including:

• Regulatory references:

https://insight.rwabusiness.com/blog/posts/2019/february/regulatory-references-and-smcr/

• Statements of Responsibilities (SoRs):

https://insight.rwabusiness.com/blog/posts/2019/october/who-s-responsible-understanding-responsibilities-under-smcr/

• Fitness and Propriety assessments:

https://insight.rwabusiness.com/blog/posts/2019/october/fitness-and-propriety-under-smcr/

• Criminal records checks:

https://insight.rwabusiness.com/blog/posts/2019/july/criminal-records-and-smcr/

Over the last few weeks, we have also published articles focusing on each of the three key elements of the new regime: the Senior Managers Regime, the Certification Regime and the Conduct Rules. These provide an overview of each aspect of SM&CR.

SM&CR has been described by the regulator as a “catalyst for driving cultural transformation” within the industry. As such, the new regime is expected to impact upon organisational culture in financial services. Organisational culture is often deeply-rooted. Indicators of an organisation’s culture will include things such as attitudes to diversity and inclusion, leadership and management, incidents of misconduct and how these are dealt with, and corporate governance. We have written multiple articles on these topics, such as:

• What is organisational culture and why is it important?

https://insight.rwabusiness.com/blog/posts/2019/april/what-is-organisational-culture-and-why-is-it-important/

• Leading from the top:

https://insight.rwabusiness.com/blog/posts/2019/march/leading-from-the-top-directors-duties/

• Diversity and Inclusion:

https://insight.rwabusiness.com/blog/posts/2019/november/diversity-and-inclusion-doing-more/

• The impact of organisational culture on retaining employees:

https://insight.rwabusiness.com/blog/posts/2019/september/the-impact-of-organisational-culture-on-retaining-employees/

• Leadership and organisational culture:

https://insight.rwabusiness.com/blog/posts/2019/may/leadership-and-organisational-culture/

• Non-financial misconduct:

https://insight.rwabusiness.com/blog/posts/2019/november/the-risk-of-non-financial-misconduct/

• Sexual harassment and SM&CR:

https://insight.rwabusiness.com/blog/posts/2019/january/sexual-harassment-and-smcr-the-fca-has-its-say/

Don’t forget that implementation day is just the beginning. Jonathan Davidson of the FCA stated that SM&CR “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 [09/12/19] is just the starting point for what firms need to do to live the spirit of the regime.”

SM&CR aims to set a new standard of personal conduct in the financial services industry and reduce harm to consumers. It is intended to be a permanent, positive change – not something to be forgotten about after implementation day.

It’s also important to remember that, by 9 December 2020, firms must ensure that:

• all relevant staff are trained on the Conduct Rules and how these apply to their roles
• staff covered by the Certification Regime are fit and proper and are issued with a certificate confirming this
• they submit data to the FCA for the directory of key people working in financial services

The implementation date of SM&CR has now passed, but there is still work to do.

If you need any help with SM&CR or feel you’re not prepared for the new regime, please contact helpdesk@rwagroup.co.uk to find out more about our SM&CR Helpline service.