The Senior Managers & Certification Regime (SM&CR) – Plan your 2019
This is the year that the Senior Managers & Certification Regime (SM&CR) comes into force for solo-regulated firms (i.e. firms regulated solely by the FCA). At RB Compliance Consultancy we have certainly noticed a surge in queries since the turn of the year with requests for support building core policies, statements of responsibilities, advice around the allocation of senior management responsibilities, preparing fit and proper assessments and conduct rules training. This increase indicates it is time to scope your project and set your project plan.
SM&CR is split into three elements:
Senior Managers Regime,
Certification Regime, and
The rules, when looked at in-depth are actually quite complex and depend on the group structure of the firm, whether a senior manager is a non-executive and whether the firm falls within the limited, core or enhanced regime. For further information on these elements you can refer to our previous article on SM&CR or the FCA’s Final Rules.
Each firm will likely have the following actions to take to be ready for SMCR:
Identify the senior managers and their functions
Identify whether any changes are likely on or around the deadline
Ensure a clear organogram is in place with senior managers designated to each area
Scope the responsibilities of each senior manager
Assign the prescribed responsibilities to the most appropriate senior managers
Create one statement of responsibilities per senior manager per firm encompassing all of their SMFs where they hold multiple roles
Provide conduct rules training for each senior manager prior to December 2019
Create a process for hiring new senior managers post implementation
Create a process for undertaking fit and proper assessments of senior managers annually
Create a process for amending statements of responsibilities
Put measures in place to evidence the duty of responsibility
Update breach reporting process
Enhanced firms will need to ensure they produce responsibilities maps and have a process to update these as well as prepare conversion documentation prior to December 2019.
Identify who falls under the certification regime
Provide conduct rules training for certification staff prior to December 2019
Consider the process for notifying the FCA of those you certify
Create a process for hiring new staff that fall under the certification regime
Create a process for re-certificating certification staff annually
Update record keeping process and data retention schedule to meet requirements of SMCR
Create a process for identifying, logging and reporting conduct rules breaches
Provide conduct rules training for all staff by December 2020
Not a short list is it?! It is definitely the time to start planning the actions that you need to take. Further details on the processes you will need to create can be found in our SMCR Practical Guidance document which will be released at the end of this month. If you would like to be the first to be notified of its release, please sign up to Compliance Insights.