FCA has made its final rules on applying the certification regime that forms part of the senior managers regime (SMR) to certain individuals engaged in wholesale trading, and interim rules on regulatory references:

  • the Individual Accountability (Extension of Scope) and Whistleblowing (Amendment) Instrument 2016:
    • amends the Senior Management Arrangements Systems and Controls Sourcebook (SYSC) from 7 March to give guidance on application of rules to temporary UK positions;
    • amends SYSC from 7 September to introduce two new “significant harm” functions, relevant to firms already covered by the SMR. The new functions are client-dealing and algorithmic trading. This will bring within the scope of the certification regime those who deal, arrange, manage or advise in relation to investments other than non-investment insurance contracts and act as bidder’s representative in emissions auctions, and those who develop or are responsible for ensuring the compliance of, trading algorithms;
    • amends the Code of Conduct Sourcebook (COCON) from 7 September to clarify the jurisdictional scope of certain activities; and
    • makes minor, consequential and clarificatory amendments to other parts of the Handbook including the Glossary and Training and Competence Sourcebook; and
  • the Individual Accountability (Regulatory References) (Interim Requirements) Instrument 2016 take effect from 7 March, and continue the current regime for references for persons who are already approved under the approved persons framework. FCA has done this as it needs more time to consider and implement its proposed rules addressing references for those in relevant firms taking on senior management or significant harm functions.

(Source: FCA Extends Certification Rules and Makes Interim Reference Rules)