The Financial Conduct Authority and Prudential Regulation Authority published policy statements on 4 July on the extended Senior Managers and Certification Regime, setting out near final rules for solo-regulated firms and final rules for insurers. The FCA confirmed the implementation date for FCA solo-regulated firms and has launched a consultation on introducing a public register of individuals working in financial services.
The Financial Conduct Authority (FCA) has confirmed that the extended Senior Managers and Certification Regime (SMCR) will apply to FCA solo-regulated firms from 9 December 2019 and has published
- policy statements setting out its near final rules for FCA solo-regulated firms and insurers;
- final guidance for FCA solo-regulated firms and insurers on the duty of responsibility; and
- a consultation on introducing a public register of individuals working in financial services.
The Prudential Regulation Authority (PRA) has also published final rules for insurers, which are to take effect on 10 December 2018. We set out below some of the key highlights from these publications.
FCA SOLO-REGULATED FIRMS
The FCA proposes to implement the rules largely as they were consulted on, with some changes made in light of feedback received. Changes include
- a new process for firms wishing to voluntarily opt up to enhanced standards;
- amendments to the thresholds for being an enhanced firm;
- the removal of the prescribed responsibility for core firms to inform the governing body of their legal and regulatory obligations; and
- the lengthening of the time period from six to 12 months for firms to implement the enhanced regime after they have met the relevant criteria.
The rules are expressed as being “near-final” as they are subject to commencement regulations to be made by HM Treasury, but the FCA says that it does not expect to make any significant changes to them.
The FCA has also published a Guide to the SMCR for FCA solo-regulated firms that provides a high-level summary of how the SMCR works and the requirements under the new regime. Firms should be acting now to ensure that, both structurally and culturally, they are ready for the changes that the regime will bring and to ensure ongoing compliance with the SMCR after implementation.
PUBLIC DIRECTORY OF INDIVIDUALS
As the financial services register (FS Register) only includes FCA- and PRA-approved persons, persons appearing on the register as approved persons under the current approved persons regime will not appear on the register if they become certified persons instead of senior managers. This could include persons such as traders, team managers, and customer advisers. There has been much concern that this leaves a considerable gap, and the FCA has received substantial feedback on the public value of it maintaining a central public record of certified persons.
Therefore, the FCA is proposing to introduce a directory that would include, amongst others, all certified staff under the SMCR and non-senior manager function directors.