The Financial Conduct Authority (FCA) has published proposed rules to extend the Senior Managers and Certification Regime (SMCR) to all financial services firms.
The current SMCR model for banking firms will be applied to “enhanced SMCR firms,” (for example, asset managers with assets under management of at least £50 billion). Other firms will be subject to a lighter, less prescriptive regime. The extension of SMCR also extends the “certification regime” under which individual firms and their senior managers (rather than the FCA) will be responsible for assessing and certifying the fitness and propriety of individuals carrying out a “certification” function on an ongoing basis.
This is proposed to cover individuals presently registered under the approved person customer function as well as several other categories, including anyone who may be a material risk taker for the purposes of the FCA Remuneration Code.
New conduct rules, based on those which are currently applicable to banking firms, will apply to all firms and all of their staff except ancillary staff who do not perform a financial services role (such as receptionists, cleaners, HR administrators).
These rules will be directly enforceable and firms will be required to ensure that staff are trained in how the rules apply to them.
The rules are now final and will come into force for solo-regulated firms on 9 December 2019.