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SMCR: What should firms be doing now?

SMCR: What should firms be doing now?

The new SMCR comes into force from 9 December 2019 for all FCA solo regulated firms so what should firms be doing now to ensure they are ready?

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Tom Brown

Partner, UK Audit

KPMG in the UK

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Whilst many firms have now identified the relevant populations of Senior Managers and Certified staff within their businesses, there remains significant work to complete ahead of the beginning of the regime. Key tasks remaining include:

  1. Finalising the allocation of the FCA specified prescribed responsibilities across the Senior Manager population
  2. Updating governance arrangements to reflect any changes arising to committee structures, terms of reference and membership and for enhanced firms ensuring these are aligned with the Management Responsibility Map
  3. Finalising the drafting of Statements of Responsibility (required for all Senior Managers), the Management Responsibility Map (required for enhanced firms) and completing and submitting the appropriate FCA forms and documents.
  4. Engaging with Senior Managers, collectively and individually, to ensure they fully understand their obligations under SMCR and accept their Statements of Responsibility, relevant Prescribed Responsibilities and the adequacy of the supporting reasonable steps framework in place to support them in discharging their responsibilities.
  5. Documenting processes and policies to cover the certification regime, the fit and proper assessment, vetting, regulatory references, the conduct rule regime and, for enhanced firms, the Senior Manager handover arrangements.
  6. Implementing the infrastructure to support these new policies and processes to ensure ongoing compliance with the regime including the reasonable steps framework, the reporting requirements, the fit and proper certification assessment and breach management framework.
  7. Training staff on what the Regime means for them including the impact of the conduct rules on them as individuals and the differences from the Approved Person Regime.
    In undertaking the above tasks, it is important to remember that the SMCR regime operates at a legal entity level and therefore, any international and/or group impacts need to be worked through with care.

The cut-off date for submitting the appropriate paperwork to the FCA ahead of the start of the regime is 24 November 2019.

If you would like to discuss any of the above areas, please do not hesitate to get in touch.

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