If you are a solo-regulated FCA firm, you will be transitioning into the Senior Managers & Certification Regime on 9 December this year. CEOs of relevant firms were sent reminders earlier this year encouraging them to prepare. Read on to find out more.
Updating you on what's happened so far this year
On 26 July, the FCA published a Policy Statement (PS19/20) with the final rules on extending the SM&CR to FCA solo-regulated firms, and confirmed that Heads of Legal do not need to be approved as Senior Managers.
At the same time, the FCA confirmed the final rules on a new directory of individuals (which includes certification staff) working in financial services, as consulted on and outlined in (PS19/7). Banking firms and insurers can now start submitting data on directory persons using Connect, the FCA's online system. All other firms may start to submit data on 9 December 2019.
In March, the FCA published guidance (FG19/2) to give firms practical assistance and guidance on preparing Statement of Responsibilities and Responsibilities Maps.
On 29 March, the FCA published a policy statement (PS19/9) on applying the SM&CR to claims management companies (CMCs). CMCs became subject to FCA regulation from 1 April 2019 so will be subject to the SM&CR from 9 December 2019 (or from when the CMC becomes FCA authorised, if later).
On 30 January, the Banking Standards Board (BSB) published a consultation"Certification Regime: Regulatory References" in which the BSB sought views on its proposed draft good practice guidance on regulatory references. Although directed at the banking sector, it will also be helpful guidance for the wider financial services sector.
Clyde & Co's employment and regulatory teams can help you in 3 key areas:
Train HR teams on the basic principles of SM&CR and how the conduct rules may affect, or give rise to disciplinary matters.
Provide specially designed training aimed at different levels of your organisation (from the Board through to other "conduct rules staff") on what the new regime means to them and the potential personal consequences for breaching the conduct rules.
Review and draft amendments to contracts of employment and relevant policies, such as fitness & propriety and disciplinary policies to take account of the conduct rules.
We have considerable experience in advising in this area: such as when banks and insurers transitioned to the SM&CR and SIMR respectively in 2016, and again when insurers transitioned to SM&CR in December last year. More recently we have advised many financial services firms in connection with their up-coming transition process.