08Nov

What is the Senior Managers and Certification Regime, and How Will It Affect My Organisation?


On 4th July 2018, the Financial Conduct Authority (FCA) published changes to the Senior Managers and Certification Regime (SM&CR). Here we run through the new changes and what they may mean for you.

What is Set to Change?

The Senior Managers and Certification Regime will be implemented to reduce harm to consumers and strengthen market integrity by making individuals in positions of power more accountable for their conduct and competence.

This will see the FCA take more action on behaviour which previously was outside its regulatory remit and will come into action of 9th December 2019.

As of July 2018, there are now new Prescribed Responsibilities for Conduct Rules, changes to the way the existing 12-week rule operates for temporary appointments or senior managers, and an extension of the partner senior management function to banks.

Depending on your current level of employment screening, this could mean more in-depth checks for a greater number of staff.

What is The Senior Managers and Certification Regime?

There are three components to the Senior Managers and Certification Regime:

• The Senior Managers Regime
• The Certification Regime
• Conduct Rules

The Senior Managers Regime

Under FCA regulation, the most senior people, who perform key roles within an organisation require approval before starting a job.

The FCA handbook and PRA rulebook outline which roles are ‘senior management’ functions, and ensures that everyone fulfilling these positions possesses a Statement of Responsibilities which details what they are responsible and accountable for. Those in the banking sector must also be provided with ‘responsibility maps’ which visualise this information.

As a senior manager, a person must be responsible for a firm’s business functions and activities, known as ‘overall responsibilities’, and the firm must review their suitability once a year.

The Certification Regime

This applies to any employees whose role has the potential to cause significant harm to the firm or its customers. These ‘certified functions’ do not need to be FCA approved, but firms are responsible for ensuring those in these positions are fit and proper. This should be assessed at least once a year.

The Conduct Rules

These are behaviour standards that apply to almost everyone in the banking sector, however there are some additional rules that also apply to senior managers. Firms are required to run training and ensure staff know which conduct rules apply to them. This involves reporting any breaches to the FCA.

Do You Require FCA Clearance Screening?

We recognise that there are a number of regulated positions in financial institutions where screening is a mandatory requirement. That’s why we offer more in-depth vetting and ensure applicants are fit and proper. We do this through a number of different checks under the Financial Services and Markets Act 2000.

Find out more about our FCA screening services by getting in touch with our friendly team today.

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