SMCR. Are you ready?

Are you ready for SMCR?

The Senior Managers and Certification Regime (SMCR) comes into effect on the 9th December 2019 for solo-regulated firms. This affects all Financial Services and Markets Act (FSMA) authorised firms.

SMCR represents a complete overhaul of the current Approved Persons Regime and will require a considerable amount of effort, resource and time across all areas of the business to implement the regime. SMCR purpose is to improve accountability and enhance a financial services firm’s focus on the culture within.

How does this impact you?

Many firms will need to accelerate the pace at which they are preparing for SMCR. The amount of work required ahead of the deadline cannot be underestimated. For some firms, the coming of this new regime will necessitate substantial changes to both governance and culture.
If you are solo-regulated firm, there are new policies, processes, and documentation that you must implement. The engagement that needs to take place with certain individual employees will take time to prepare to make the necessary changes to your overall business culture, as required by the regulator. In addition, you will need to make sure you train your employees across your firm on SMCR individually, as it will in many cases touch on their day-to-day roles.

It’s important for firms to start working on SMCR in earnest today. Peak Consultants can provide you with the essential elements to help you become compliant with the new regime.
The SMCR aims to reduce harm to consumers and strengthen market integrity by creating a system that enables firms and regulators to hold people to account. As part of this, the SMCR aims to:
• encourage staff to take personal responsibility for their actions,
• improve conduct at all levels,
• make sure firms and staff clearly understand and can show who does what.
The FCA expects firms to be able to demonstrate they have embedded in their organisation the processes and cultural change envisaged by the new regulations.

SMCR has three key parts:
1. The Conduct Rules – set minimum standard of individual behaviour and aim to improve individual accountability and awareness of conduct issues across firms. These will apply to almost all employees involved with financial services activities, with some of the rules just applying to senior managers.
2. The Senior Managers Regime – the most senior people who perform key roles will need FCA approval before starting their roles and each will have a ‘statement of responsibilities’ clearly setting out their responsibilities and accountabilities.
3. The Certification Regime – this relates to roles that are called ‘certification functions’ and are essentially all those that employees whose role could cause significant harm to the firm or its customers. They don’t have to be approved but firms need to check and confirm they are fit and proper to perform their role at least once annually.

How can Peak Consultants help?
Peak Consultants provides a comprehensive and practical suite of SMCR planning solutions, designed to help firms and individuals achieve and maintain compliance when the regulation comes into effect. Our SMCR services range from full implementation of the regime to a review of your firm’s current project programme.

Our services include:
• Supporting and advising on any Senior Management Function (SMF) applications or notifications required;
• Supporting you in the preparation of Statements of Responsibilities (SoR);
• Assisting in the identification of any individuals who will be subject to the Certification Regime (e.g. those carrying out
Significant Management Functions);
• Assisting you in identifying which of your staff are subject to the Conduct Rules;
• Advising on and supporting the development and delivery of your (HR) processes for:
• Assessing and verifying the Fitness and Propriety of SMFs and Certification staff initially and on an on-going basis;
• issuing certificates to Certification staff;
• verifying criminal records checks when required;
• verifying regulatory references when required;
• training your relevant staff on how the Conduct Rules apply to their roles;
• breach recording and management of FCA of Conduct Rule leading to disciplinary action.

If you wish to discuss, or would like further information in relation to SMCR, please feel free to subscribe to receive regular Insights from Peak Consultants or get in touch.


* indicates required

Scroll to Top