On 11 October 2018, the FCA published a guidance consultation for FCA-authorised firms on preparing statements of responsibilities and responsibilities maps under the Senior Managers and Certification Regime (SM&CR). Under the SM&CR, which will apply to all FCA authorised firms from 9 December 2019, firms will be required to prepare statements of responsibilities for each senior manager, and all enhanced firms will be required to have a responsibilities map.
While the guidance is directed at FCA-authorised firms, the FCA has indicated that it may also be useful for dual-regulated firms such as insurers and banks, which will also be required to prepare these documents.
The proposed guidance sets out the purpose of statements of responsibilities and responsibilities maps, questions for firms to ask themselves when drafting these documents and examples of good and poor practice. These examples are followed by analysis and commentary from the FCA, and provide a useful reference tool for firms preparing their statements of responsibilities and responsibilities maps. The guidance provides analysis relevant for each category of firm subject to the regime (limited, core, as well as enhanced firms). The guidance also contains example responsibilities maps for firms to consider.
The guidance is stated to be non-binding and a departure from it will not necessarily indicate a breach of the rules. Firms may apply the guidance in a risk-based and proportionate way by considering the size, nature and complexity of the firm. In a speech today, David Blunt, Head of Conduct Specialists at the FCA, indicated that the guidance has been generated following lessons learned from applying the SM&CR for banks and other firm types which are already subject to the regime. He indicated that the purpose of the examples provided is to help firms think about what should be included in these documents, but that these examples should not be slavishly or strictly followed or copied. In practice, firms should have regard to this guidance to ensure that the documents they produce take account of the FCA’s expectations.
In our experience, preparing compliant and representative responsibilities maps and statements of responsibilities documents can be a time-intensive process and is often an area of considerable uncertainty for firms seeking to comply. In the past, regulators have provided fairly limited guidance on what these documents should look like. It is therefore helpful that the FCA has decided to provide more detailed guidance in this area.
The deadline for comments on the consultation is 10 December 2018. For further detail on the proposed guidance from the FCA as well as how to respond to the consultation, please see https://www.fca.org.uk/publications/guidance-consultations/gc18-4-senior-managers-and-certification-regime-proposed-guidance-statements-responsibilities-firms
For more information on the near final rules on SM&CR released by the FCA and PRA, see https://www.hoganlovells.com/en/blogs/fision/the-fca-and-the-pra-have-released-near-final-rules-on-the-senior-managers-and-certification-regime