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Senior Managers and Certification Regime: Solo Regulated Firms

Are you prepared for implementation?

The FCA has published its near-final rules on the extension of the Senior Managers and Certification Regime (SMCR) to almost all solo-regulated firms. Solo-regulated firms are regulated by the FCA, not the PRA and FCA.

The SMCR already applies to banks and insurers. From 9 December 2019, it will also apply to non-bank credit providers; primary and secondary credit brokers; insurance brokers; investment firms; fund and asset managers; and peer-to-peer lending and crowdfunding platforms.

If you’re in a solo-regulated firm you need to start preparing now, if you’re to comply with the new requirements, in the right way, and on time.

How it applies

There are three tiers under the SMCR:

  1. Limited scope firms that already have exemptions under the Approved Persons Regime will be exempt from some of the SMCR’s baseline requirements. They may also have fewer senior management functions.
  2. Core firms in this tier will have to comply with the core or baseline requirements. Most firms will be in this tier.
  3. Enhanced this will apply to a small number of firms whose size, complexity and potential impact on consumers or markets warrant more attention. These firms will have to comply with more requirements.

To Do: your checklist

The SMCR is challenging from both a compliance and an HR perspective. Firms will need to:

  • Work out whether you’re a limited scope, core or enhanced firm
  • Categorise your people – will this person be a “senior management function holder”, a “certification function employee”, a member of the firm’s “ancillary staff”, or a member of its “other staff”?
  • Work out which prescribed responsibilities you need to allocate to your senior management function holders, before allocating them in an appropriate way

Prepare a suite of documents that might include:

  • Fit and Proper Policy
  • A Whistleblowing Policy
  • A Responsibilities Map
  • A complete set of Statements of Responsibilities

Update some existing documents, including

  • Your employment contracts
  • Your staff handbook
  • Your appraisal forms
  • Develop an annual certification process, and enhance your referencing and disciplinary processes
  • Train almost all of your staff on the FCA’s new Conduct Rules
  • Train your line managers on the certification process, and the circumstances in which a certificate can (and cannot) be given.

How can we help you? Our experience

Fox Williams has a dedicated SMCR team, with a wealth of experience gained from advising banks and insurers on their preparation for, and compliance with, the new regime. We are using this experience to help our solo-regulated clients prepare for the SMCR in the way that makes most sense, regardless of size and circumstance.

Initial planning package

  • Briefing to the Board on initial planning for the SMCR, outlining key principles and PRA/FCA guidance
  • Project plan tailored to the business for implementing the SMCR

Support with Senior Managers Regime

  • Identifying senior managers and mapping the business
  • Guidance for drafting statements of responsibilities
  • Meeting with senior managers to discuss impact of SMCR
  • Reviewing and updating employment contracts for senior managers
  • Drafting delegation, reference & handover policies
  • Advising on whistleblowing champion and whistleblowing policy

Support with Certification Regime

  • Identifying certification staff and mapping reporting lines
  • Reviewing and updating employment contracts for certified staff and employee handbook
  • Advising on annual certification process and assessment of fitness and propriety
  • Drafting guidelines for managers on assessing fitness and propriety and new appraisal forms
  • Establishing a process for managing, giving and receiving references

Training to suit you

  • Initial Board training
  • Initial training for all designated senior managers (ex/including Executives)
  • Preparation and delivery of conduct rules training programme tailored to the business
  • Delivery of annual conduct rules training to all staff (excluding ancillary staff)

Our health check package

  • Initial Board training
  • Initial training for all designated senior managers (ex/including Executives)
  • Preparation and delivery of conduct rules training programme tailored to the business
  • Delivery of annual conduct rules training to all staff (excluding ancillary staff)

Our SMCR specialists

For more information, and to discuss how we can help you, contact one of our specialist team, or your usual Fox Williams contact.

 

 

 


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Who should I contact?

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Peter Wright
Partner
Direct dial: +44 (0)20 7614 2680
pwright@foxwilliams.com

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Helen Farr
Partner
Direct dial: +44 (0)20 7614 2623
hfarr@foxwilliams.com

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Jane Mann
Partner
Direct dial: +44 (0)20 7614 2510
jemann@foxwilliams.com

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Chris Finney
Partner
Direct dial: +44 (0)20 7614 2614
cfinney@foxwilliams.com

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Joanna Chatterton
Partner
Direct dial: +44 (0)20 7614 2617
jkchatterton@foxwilliams.com


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