FCA extend SMCR Deadline for Senior Managers

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The FCA has extended the deadline for fulfilling certain elements of the Senior Managers and Certification Regime (“SMCR”) from 9 December 2020 until 31 March 2021.

The decision behind the deadline extension was to give those significantly affected by Coronavirus some additional time to fully implement SMCR.

The Senior Managers and Certification Regime (“SMCR”) was proposed by the FCA to allow senior managers and individuals who work in financial regulated services to take greater accountability and responsibility for any actions.

Following the credit crisis of 2008, it was challenging for firms to hold individuals responsible for any drastic financial losses, with thousands of senior managers not being held accountable and being able to blend into the overall company’s structure.

With this in mind, the SMCR was proposed to maximise accountability for individuals working in the financial sector such as those offering advice for investments, hedge fund managers and more. The SMCR framework for regulated companies includes:

  • Training for employees subject to SMCR (aside from Senior Managers and Certified Staff) on the Conduct Rules, which take effect for relevant employees at the end of the transitional period. (Note that for Senior Managers and Certified Staff the Conduct Rules have in any event applied since 9 December 2019.);
  • Assessing Certified Persons as fit and proper (i.e. conducting the initial certification; going forward this will be an at least annual requirement);
  • Providing information to the FCA on ‘Directory Persons’ (including Certified Persons and Non-Executive Directors) so that they can be included on the newly launched Directory.

The FCA outlines that unaffected firms should seek to complete the requirements earlier than March 2021 if they are able to do so – the fit and proper certification for Certified Persons is cited in the FCA post. Many firms will seek to adopt this approach, on the premise that not conducting an early assessment a Certified Person – that turns out to be not fit and proper – carries regulatory and legal risk.

A spokesman from SMCR Compliance commented on their company blog, “Firms should continue to ensure that their SMCR implementation planning remains robust, and that this reflects the changes to lines of communication and working habits that have characterised these past few months.”

“Crucially, this includes ensuring that all relevant staff have a sound understanding of not only SMCR but also their other compliance related responsibilities and obligations. In that regard, we offer a discount of 10% on all online SMCR training courses for the month of July, to support the FCA in their endeavour for firms to implement and train their staff on SMCR sooner rather than later, in accordance with their objective of improving culture, conduct and accountability at all levels within organisations.”

Regulated firms can run their own SMCR training in-house, although this can seem long-winded and many companies lack the internal resources.

There is the option of using compliance consultants such as Thistle, Scott Robert and RQC Group – and given the deadline, you can budget accordingly. In addition, there has been a slow release of SMCR training courses and e-learning video online, which appears to be a fast-growing space.

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