11Dec

The onset of the Senior Managers and Certification Regime “SM&CR” was one of the largest regulatory changes for solo regulated firms the financial services sector has seen for some time. On December 9th 2019, the first part of the SM&CR took effect, with firms being required to implement the necessary changes. Fast forward to December 2020, firm’s should have implemented the second stage of the SM&CR, however, COVID19 has significantly effected many firms ability to do this. The FCA recognised this and has extended the deadline to implement phase two of the SM&CR up to the 31st March 2021.

What do firm’s need to do in order to implement phase two of the SM&CR?

Conduct rules training

Firms subject to the FCA’s SM&CR are required to ensure they provide all their employees with training on the FCA’s “Conduct Rules” on at least an annual basis.  With the first anniversary of the implementation of the regime for FCA solo-regulated firms now upon us, it’s likely that many firms will need to carry out this annual training in order to ensure their employees understand what the Conduct Rules mean for them and to enable the firm to meet this important regulatory obligation.

One important thing that every firm must be mindful of is that if a firm does not provide training on the Conduct Rules to its employees then the firm itself can be held liable if there are mass breaches of the Conduct Rules – act now to avoid being culpable for something you didn’t even know you could be culpable for.

Ensuring training is meaningful, relevant and effective can be a challenging at the best of times, and with the current working environment, with many people still working remotely is likely to make the task even more difficult than normal.

Scott Robert can help.  We have considerable experience of delivering training sessions to employees within regulated financial services businesses covering a wide range of topics, including Conduct Rules. Our sessions can be delivered remotely via a Zoom meeting or through “Teams”, with the content both shared on screen during the session and made available to attendees after the session.  Content can be tailored so as to make it relevant for your business, with examples of good and poor conduct that are specific to the types of products and services you provide, and our sessions are always structured and delivered in such a way as to encourage engagement and questions from attendees.

For more information, or to arrange a training session for your employees, please contact us on 0161 914 5757.

Wider SMCR topics

Although the implementation of the SM&CR happened for FCA solo-regulated firms was nearly a year ago, firms subject to the regime will be aware that there are further deadlines approaching in respect of the certification of employees and the reporting of information to the FCA for the new “directory”, and that the regime imposes ongoing “maintenance” obligations on firms, including:

  • ensuring they carry out periodic checks of fitness and propriety for Senior Managers and that their “Statements of Responsibility” are accurate and up to date;
  • reviewing the apportionment of responsibilities amongst Senior Managers, including both business responsibilities and “prescribed responsibilities”; and
  • providing annual conduct rules training for all employees other than “ancillary staff”.

With the FCA likely to be checking firms’ compliance with the new requirements, and with an increasing regulatory focus on conduct and standards of behaviour, there is no room for complacency and firms need to ensure they have taken the necessary steps to comply with the obligations.

Scott Robert can help.  Our experienced team of consultants can provide support by:

 

  • reviewing existing governance and Senior Manager arrangements and benchmarking against regulatory requirements and industry best practice
  • assisting in the design and implementation of appropriate and compliance policies and processes around the certification of employees and reviewing existing policies around fitness and propriety
  • delivering conduct rules (and other) training to employees, ensuring this is relevant to your business.

For more information and to find out how Scott Robert can help your business to meet its regulatory obligations, contact us on

Quick Check

Scott Robert has provided a quick check below to see if you are ready for phase two implementation:

  • Have you trained your staff on the Conduct Rules?
  • Have you certified your relevant staff for fitness and propriety?
  • Have your SMF approved senior managers been assessed for fitness and propriety?
  • Have you reviewed your SMF approved senior managers’ statement of responsibility?
  • Have you submitted your Directory information to the FCA?

If you haven’t done any of the above, and need the assistance of Scott Robert Compliance, please don’t hesitate to get in touch.