What has happened?
Last month, the Bank of England and Financial Services Act 2016 (Commencement No 6 and Transitional Provisions) Regulations 2019 came into force. These Regulations ultimately confirm the commencement date for the extension of the senior managers and certification regime (SMCR).
What does this mean?
The SMCR has applied to banks and certain investment institutions since March 2016 and insurers since December 2018. These Regulations extend it to Financial Conduct Authority (FCA) solo-regulated firms on 9 December 2019, except for benchmark firms, for which the commencement date is 7 December 2020.
The amendments made by the Regulations came into force on 18 July 2019 for the purpose of the making of rules, the giving of directions, the imposition of requirements and the issuing of policy statements by the FCA. This means that the FCA can now publish its final rules on the regime.
The Regulations also make a number of transitional provisions.
What happens now?
Firms should look out for the FCA publishing its final rules. This will make negotiating the FCA Handbook much easier as it will allow the final rules to be incorporated into the online FCA Handbook's "time travel" function.
It is now less than five months until the regime is in force for the majority of FCA solo-regulated firms. This deadline is fast approaching and is hot on the heels of another uncertain Brexit deadline.
Getting to grips with the SMCR should now be a priority. Most firms will already have implementation projects underway. Firms should consider if they have enough resource and time to fully review their documentation, systems and procedures, create and deliver customised training of staff and carry out fit and proper assessments. Firms have had plenty of warning from the FCA and it is unlikely to be forgiving to those that fail to meet its requirements in a timely fashion.
Benchmark firms should remain alert to the future FCA consultation on how the regime will apply to them in December 2020.
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