With time ticking on towards December, there’s no shortage of SM&CR fearmongering. People are starting to worry.
But if your SM&CR project hasn’t really got going yet, all is not lost. It’s perfectly possible to deliver a robust, yet proportionate SM&CR implementation in a few months. But you do need to get things moving. Some elements of the regime will be like ‘herding cats’ and can take more time than you expect. Persuading your relevant senior individuals that they are ultimately accountable and getting them to draft their own Statements of Responsibility can be a painful exercise.
The SM&CR project plan
With SM&CR, the ‘devil is in the detail’. Getting everything done will involve many separate but inter-dependent workstreams, multiple stakeholders and increasingly tight time frames. To stand a chance of getting over the line by 9 December, you need to stick to a project plan, identifying all of the constituent workstreams and their key deliverables, with owners and timeframes for each.
The smaller your firm, the more straightforward your project will be. For many, a simple spreadsheet-based project plan is enough to properly record what needs to be done when, and by whom.
The best way to get the ball rolling, is to put the SM&CR Working Group in a room together for a few hours and map out and agree the project plan. The Working Group should then meet regularly – at least fortnightly – to review progress, identify any sticking points and continually refine deliverables and timelines. Delays and obstacles should be escalated via the senior project sponsor, and any blockages dealt with accordingly.
As we’ve seen, the new regime affects almost everyone in the firm. Most staff will fall into line provided they are managed effectively. But it’s the personal accountability that Senior Managers will be expected to take on which can be the most painful, and it’s this process that needs the most attention.
When banks went through the process three years ago, we were surprised at how keen senior managers were to talk themselves out of responsibilities which in the past they’d carried proudly.
Of course, the SM&CR introduces a more explicit risk of regulatory action against senior individuals, when things go wrong. But, the FCA are not out to create an environment where minor errors lead to draconian enforcement against individuals. Only in extreme cases of negligence or incompetence will regulatory action be taken against individuals.
So early buy in from your senior team is key. Schedule a briefing session as soon as possible. They should understand what the new regime will mean for them. They should be reassured about what the duty of responsibility means in practice. They need to understand what needs to be done more broadly across the firm. And critically, they need to be clear on their own role in drafting individual Statements of Responsibility.
Laying the right foundations for SM&CR
The more administrative aspects of the regime such as the certification of fitness and propriety, conduct rule breach reporting, regulatory referencing processes, and so on should not be underestimated. But if you’re able to lay your project foundations this spring, getting these right should cause fewer problems.
How we can help
Bovill has extensive experience of helping our banking and insurance clients with their SM&CR implementation. We are now working with solo-regulated clients who are preparing for 9 December 2019. We have developed a full SM&CR implementation toolkit and several support packages designed to help our smaller and less complex clients implement the regime in a robust, yet cost-effective manner. For those larger or more complex clients, we can provide a full and completely bespoke support service, tailored to meet your explicit needs and requirements.
Free Bovill SM&CR project template
Using our SM&CR planning template could get your project motoring whether it’s a starting point or a checklist.