On 9 December 2019, the Senior Managers and Certification Regime (the “SMCR”) will be extended to cover all UK firms that are regulated solely by the UK Financial Conduct Authority (“FCA”). This category of firms includes UK authorised fund managers (e.g. AIFMs and UCITS Management Companies), UK submanagers providing portfolio management services to a US or overseas investment manager, and UK firms providing single managed account services. One of the few categories of firm that will remain outside of this broad scope are firms that are active in the asset management sector but that simply function as Appointed Representatives for other, licensed, entities.
This extension in the scope of the SMCR to asset managers and other “solo-regulated firms” will represent a major step towards increasing individual accountability amongst senior managers and ensuring that staff throughout regulated firms are required to operate in accordance with FCA conduct requirements.
We have summarised in this briefing a number of practical steps that UK asset management firms can take over the coming months to ensure their readiness for the December implementation deadline, with a particular emphasis on the strategies that senior managers will need to adopt in order to ensure that they comply with the spirit as well as the letter of the regulatory framework. Alongside these more practical steps, however, there are a number of fundamental questions that the asset management sector will need to engage with more generally in the lead-up to implementation.
