All remaining Financial Conduct Authority (FCA) regulated firms, including for example FCA regulated asset and wealth management firms, brokers and trading firms, will become subject to the Senior Managers and Certification Regime (SM&CR) on Monday, 9 December 2019.
SM&CR replaces the current 'Approved Persons Regime', other than for Appointed Representatives of regulated firms (for which the Approved Persons Regime continues) and payment services and e-money firms (which have a separate regime). The SM&CR seeks to reduce customer harm as part of the FCA's focus on culture, governance and individual accountability. It represents a major reform in how culture, governance and responsibility are embedded within firms, reported on and monitored by the FCA.
We have found that it provides opportunities as well as challenges for clients, as it is acts as a catalyst to review, update and perhaps improve upon a firm's governance structure and related constitutional and employment documentation and processes; to ensure they both reflect day-to-day reality and are fit for purpose. The FCA does not prescribe what that governance structure should be, but will expect firms to be able to report on and explain their arrangements.
We held a series of workshops, working together with IQEQ, to help our clients prepare ahead of the 9 December implementation date. Preparation is key, including ensuring proper co-ordination between management, compliance and human resources teams and, for example, sufficient training and consultation with Senior Managers.
In addition to running client workshops and working on individual implementation projects for clients, we have produced a number of guidance notes; including for example our recent Briefing Note for Broking and Trading Firms. They include further information on the regime and its implementation, but we would be delighted to assist anyone who needs last minute help prior to the deadline, or with those aspects of SM&CR projects that will continue through December and into the New Year.