As the SM&CR (Senior Managers & Certification Regime) was implemented for solo-regulated firms nearly two years ago, there may now be a case for firms to consider conducting an internal compliance review to ensure that the regime has been correctly implemented and that account has been taken off more recent regulatory developments. Some specific areas for this kind of review are suggested below.
The real driver behind conduct and behaviour in an organisation is its culture. Firms may consider assessing their organisational culture too before or when they proceed to review SM&CR.
Firms are set to be held to a much higher standard of care once the Consumer Duty comes into effect in July 2022, so it is worth considering how this Duty will potentially influence their Senior Managers & Certification Regime arrangements. See our blog FCA proposes stronger protection for consumers in financial markets.
In the period since SM&CR implementation, the way the financial services sector operates has changed, with the pandemic making remote and hybrid working standard practice for many firms.
Consequently, firms will need to make sure cross-departmental communication between compliance and HR still works as it should to ensure the smooth running of SM&CR compliance – even if many staff are now working from home.
The FCA has been increasingly keen to tackle non-financial misconduct, as the recent Jon Frensham case [see our blog FCA publishes Decision Notice against Jon Frensham] shows that SM&CR must take account of this issue.
Every time someone joins or leaves, a firm’s SM&CR records and documentation will need revising to match. Statements of Responsibility and the corresponding responsibility maps (where applicable) will need amending and the FCA will also update the Financial Services Register when a new Senior Management Function is approved. Firms must also notify the regulator of any revised Controlled Functions so that it can keep the Directory up to date.
Any significant change or addition to a firm’s strategy or business model is likely to have a knock-on effect on its SM&CR plan. If expanding to a new location, exploring a new market or adding a new product to their offering, firms must be aware of how it could impact the number of Senior Managers and Controlled Functions in their business, as well as their regulatory permissions.
If you’d like to know more about how we can help you with Senior Managers & Certification Regime arrangements, or with any other regulatory compliance issues, our expert team is here to help.
Contact us today on 0207 436 0630 or email info@thistleinitiatives.co.uk.