The FCA have published near-final rules on the extension of the Senior Managers and Certification Regime to all FSMA authorised firms.
The FCA rules are near-final, as these are subject to commencement regulations to be made by HM Treasury. They do not expect to make any significant changes to the near-final rules. They believe that holding individuals to account is a key component of effective regulation. The Senior Managers and Certification Regime (SM&CR) currently applies to banking firms and, following the Bank of England and Financial Services Act 2016, is now being extended to FCA solo-regulated firms.
It replaces the current Approved Persons Regime, changing how individuals working in financial services are regulated. The aim of the new SM&CR is to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence.
As part of this, the SM&CR aims to:
• encourage a culture of staff at all levels taking personal responsibility for their actions
• make sure firms and staff clearly understand and can demonstrate where responsibility lies
This Policy Statement sets out near-final rules for the extension of the SM&CR.
Who this applies to
This Policy Statement is relevant to all solo-regulated firms. Elements are relevant to banking firms. As well as the firms themselves, the proposals will affect everyone performing financial services roles at those institutions. The proposals in this consultation do not extend to approved persons and individuals at Appointed Representatives of affected firms. Consumers may be interested how individual accountability is being enhanced within financial services.
HM Treasury has decided that the regime for solo-regulated firms will commence on 9 December 2019. Firms should also read ‘The Senior Managers and Certification Regime: Guide for FCA solo-regulated firms’. The guide is a summary of our rules and guidance on the SM&CR. It gives an overview of how the SM&CR works and how we will move firms and individuals to the new regime.