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Gateley (Holdings) Plc

The Senior Managers and Certification Regime: The next big thing

Whilst banks have been living with the Senior Managers & Certification Regimes (SMCR) for some time, the Financial Conduct Authority (FCA) is extending its reach to all authorised firms, including insurers, asset managers, insurance and mortgage brokers and consumer credit firms. The government anticipates the SMCR will come into force for these other firms during the early part of 2018.

Firms affected by SMCR will need to start planning their own implementation projects.  This will require them to look at their governance and clearly document their risk management structures. SMCR will mean that a much larger proportion of a firm’s employees will be subject to regulatory scrutiny – which will have far-reaching implications for recruitment, training, appraisal and disciplinary processes.

A draft of the new rules (which runs to nearly 400 pages!) is set out in a consultation paper recently issued by the FCA. What follows is a summary of the practical steps which firms should consider taking as part of their implementation plan to become SMCR-compliant.

What should you be doing now?

Getting ready for the new regime will involve a considerable amount of preparation.  Firms should devote time to proper planning of the project and dedicate sufficient resources.  Given that the SMCR places a great deal of emphasis on personal responsibility and accountability, good internal communication will be a crucial part of the process. Talking through the requirements will ensure key people ‘buy in’ as early as possible.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.