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SM&CR

Senior Managers & Certification Regime

When it replaces the current Approved Persons regime for all solo regulated firms* on 9 December 2019, the Senior Managers & Certification Regime (SM&CR) will significantly raise the bar on standards of personal conduct and put a new more stringent emphasis on management accountability.

The Senior Managers & Certification Regime impacts not just your board members and senior managers but anyone in your firm who’s involved in any aspect of regulated activity.

At Thistle, we understand exactly what SM&CR requires, and we’re currently applying this knowledge to help a wide range of businesses prepare for the new regime.

What you need to know about SM&CR

  • The regime replaces the category of Approved Persons with that of Senior Managers and charges Senior Managers with a range of new responsibilities.
  • As well as looking at Senior Managers, SM&CR also requires firms to identify individuals in the next tier of management down – and those performing certain specific roles (certification functions). At least once a year, firms must evaluate and certify these named individuals’ fitness for the roles they perform.
  • SM&CR also introduces criminal record checks for both Senior Managers and non-executive directors.
  • The Senior Managers & Certification Regime also introduces a new template which firms must use to provide regulatory references for Senior Managers and staff in certification function roles
  • Another significant change is that Conduct Rules now apply to all staff (other than those in ancillary roles, e.g. cleaners), meaning that your staff will need training in the rules as these apply to their roles. SM&CR also brings in additional rules for Senior Managers and requires that any breaches of the rules must be reported to the regulator.

What you need to do to prepare for SM&CR

If your firm isn’t yet up to speed with the Senior Managers & Certification Regime, don’t panic. There is still time… but you will need to start preparing now. That 9 December deadline really isn’t far off.

The Senior Managers & Certification Regime represents a significant change in how the FCA regulates senior employees. As well as exposing your organisational structures to more intensive scrutiny, it increases the onus on you to make sure your staff are fit and proper for the roles and responsibilities you’ve allocated them.

Crucially, your preparations should include taking a long hard look at your firm’s current structure to make certain you have the right people in the right roles. You’ll need to identify who’ll be captured by the certification regime. Some roles, including current CF30 positions, will automatically require certification.

You will also need to provide your staff with training in the new conduct rules and put a reliable process in place for identifying and reporting any breaches.

There’s a lot to think about – but help is at hand.

As a starting point, you can download our document 10 Steps to SM&CR Compliance (available in three sector-specific versions) by clicking on one of the links below:

How Thistle can help

At Thistle we’re already helping hundreds of firms prepare for the new regime, walking them through the various elements of SM&CR, explaining how these will impact their businesses, providing expert advice, and answering a host of questions.

In other words, we’re well prepared to help you prepare.

  • We’ll talk you through the key aspects of SM&CR and how it will impact your board, your Senior Managers, and your firm in general.
  • We’ll conduct a gap analysis to establish where you are now, and map out where you need to be.
  • We’ll help you develop compliant processes and documentation.
  • We’ll provide a combination of online and bespoke face-to-face training to ensure all your staff are fully prepared for SM&CR.

To learn more about how we can take the stress out of preparing for the Senior Managers & Certification Regime, please get in touch. You can reach us by filling in the contact form on the right, by emailing info@thistleinitiatives.co.uk, or by calling 0207 436 0630.

* SM&CR does not apply to payment services firms or Appointed Representatives

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