Senior Managers & Certification Regime

With the extension of SM&CR across financial services coming in just a few months, most firms are already looking at their plans. But what are the hardest parts going to be? What can we learn from those who’ve already been through it?

Since March 2016, banks, building societies and other dual-regulated firms have been subject to the FCA’s  Senior Managers & Certification Regime (also known as SM&CR, SMCR, and SMR). This regime will be extended across the entire UK financial services industry from 9 December 2019, replacing the Approved Persons Regime for FCA-regulated firms.

December 2019 may sound a long way off, but some aspects of preparation can be harder – and take longer – than you think.

SM&CR – the tricky bits

The ethos behind the regime boils down to good corporate governance. But there are significant challenges, even for firms that aren’t subject to the more difficult ‘enhanced’ regime. These include:

  • Persuading certain senior staff to accept individual accountability.
  • Pinning down exactly who is responsible for what – this can be especially hard in firms that are part of large or international groups and have matrix management in place.
  • Understanding what is meant by ‘reasonable steps’ under SM&CR and working out how to show you’ve taken them.
  • Tackling the ethical and legal aspects of regulatory references and of disclosing adverse information about former employees.
  • Planning how to maintain historic records of allocated responsibilities or conduct rule breaches.
  • Putting in place robust policies and procedures for all the ‘nitty gritty’ requirements that underpin the regime as well as the major ones that are usually tackled first.

Implementing SM&CR adds up to a significant change project, and one that needs to be tackled systematically and in plenty of time. Ownership is key. For most firms, responsibility for the project is best driven by a multidisciplinary working group including Legal, Compliance, HR and perhaps the CEO/chairman.

To find out more about the implications of SM&CR for your firm, request our paper: Senior Managers & Certification Regime: What it means for you.

We can help

We’ve helped banks implement the Senior Managers and Certification Regime and know how to get past the challenges and get things done.

We can:

  • project manage your SM&CR implementation
  • review your existing governance framework and suggest any required changes or refinements
  • provide SME advice on the regime and how to implement the new requirements
  • facilitate workshops to get the appropriate buy-in and engagement from key stakeholders (for example the SMFs)
  • provide training on the new regime and what it means for individuals affected
  • provide the required conduct rule training for staff at all levels within the business
  • help prepare and draft individual statements of responsibilities and management responsibilities maps
  • define and articulate the key processes to underpin the new regime.

Get in touch to see how we can help.

Share this