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What is the Senior Managers and Certification Regime?

The Financial Conduct Authority (‘FCA’) has made its intention clear that the Senior Managers and Certification Regime (SMCR), which until nowimpacted the banks, PRA regulated investment firms, building societies and credit unions, will be extended to all firms within the financial services sector in 2019, signalling the end of the Approved Persons Regime.

The principle of proportionality will be particularly important as the SMCR is extended to the broader range of firms operating in the financial services industry. This will mean a tailored approach by regulated firms.

This will mean a tailored approach by regulated firms.

The Senior Managers Regime

Applies to those who hold the most senior roles

The Certification Regime

Applies to those who hold key roles at the firms but are not senior managers

The regulators have provided definitions of who would be subject to this part of the regime

The Conduct Rules

Applies to everyone (bar ancillary staff)

 

The PRA and FCA have issued rules and guidance to firms about how they should implement and adhere to the requirements.

Due to the nature of the SM&CR a cross-Eversheds team combining both legal and consulting expertise has been established. This is a unique proposition for clients – We have worked with impacted clients as they implement the requirements and to provide assurance that they are meeting the requirements.

Key areas to think about:


Allocation of responsibility

HR implications - regulatory references, updating contracts

Reviewing current governance arrangements

Fit and proper assessments

Handovernotes

There are a number of elements to the SM&CR, in addition to mapping the new requirements, clients should start thinking now about their governance arrangements, and committee terms of reference and ensuring role profiles clearly set out the responsibilities.

There are a number of elements to the SM&CR, in addition to mapping the new requirements, clients should start thinking now about their governance arrangements, and committee terms of reference and ensuring role profiles clearly set out the responsibilities.

What we can do for you

We can provide pragmatic and sustainable solutions to your SMCR project in the following areas:

  • design, delivery and facilitation of Board level awareness workshops (including non-executive directors)

  • a governance gap analysis and governance structure review including a review of committee terms of reference

  • development of the Responsibilities Map in line with your business model

  • assessment of the relevance of the application of business activities and prescribed responsibilities to individual senior managers

  • development of the senior managers’ statements of responsibility linked to their role profiles

  • assessment of the application of the Certification Regime and identification of appropriate “significant harm” or “material risk takers” individuals

  • design and delivery of staff training and awareness

  • drafting and/or amendments to policies and procedures

  • work with your HR and legal teams to bring about the required changes to employee contracts

  • provide interim legal and compliance professionals as well as project management resource