GUEST SHORT
This week, Nancy King, senior partner at Portman Compliance Consulting LLP, provides us with a short summary on the Senior Managers & Certification Regime, taken from their publication “The Senior Managers & Certification Regime: The ‘Proportionate & Flexible’ route to a ‘Culture of Accountability’”, as follows:
“Currently, the Senior Managers & Certification Regime (SM&CR) rules only apply to banking sector firms (relevant authorised persons – ‘RAPs’), more specifically those with permissions to accept deposits or who are PRA-regulated and may deal as principal. The FCA has published a consultation paper (CP17/25), setting out the FCA’s proposals on the SM&CR, and invites responses by 3 November 2017. The new SM&CR requirements will apply to all FSMA-authorised firms (except insurers at present), including incoming branches of non-UK firms, and are expected to take effect early 2018, although no specific date has been set as yet. It should be noted that the treatment of approved persons of appointed representatives will be considered in a follow up consultation paper.
The SM&CR will be more rigorous than the approved persons regime. It will require senior managers to accept, and more importantly “document” their own accountability and responsibility for designated business areas. From the regulator’s point of view, it puts into operation one of the FCA’s cross-sector priorities: Firms’ Culture & Governance (see chapter 6 of the FCA’s 2017/18 Business Plan). Critically, it is worth noting that one size does not fit all where SM&CR is concerned; the FCA states the new regime will be “proportionate and flexible” and will apply a ‘baseline of requirements to every firm, known as the “core regime”. The majority of firms will fall under the “core regime”’, with only the creatures great and small sitting within the “enhanced regime” or the “limited scope regime”.
Firms will be required to train all staff (except ‘ancillary staff’) to ensure that they are aware of the conduct rules and must notify the FCA of any breaches of the conduct rules by Senior Management. The new conduct rules will replace APER, but are much the same i.e. act with integrity, due skill, care and diligence etc.”
A full version of “The Senior Managers & Certification Regime: The ‘Proportionate & Flexible’ route to a ‘Culture of Accountability’” can be found at: https://www.linkedin.com/pulse/senior-managers-certification-regime-proportionate-flexible-spencer?trk=mp-reader-card.
If you would like to discuss the above or receive further information regarding the SM&CR, please contact Nancy King at: nancy@portmancompliance.com.
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