Telephone 020 3813 2890 for a free no obligation chat about your regulatory requirements with one of our compliance consultants.

© Compound Growth Limited 2012 - 2018 | Terms of Use

Registered in England and Wales as limited company number 07626537 - Registered Office 120 Pall Mall, London, SW1Y 5EA

We use cookies, if you consent to this use, please continue to browse our site.

Here to help with Regulation and Compliance

Compound Growth

SMCR: One Year Later

7th March 2017

One year later - the Senior Managers & Certification Regime (SMCR)

Twelve months after the Senior Managers and Certification Regime was introduced for the Banking and Insurance sectors, the FCA today published their reflection on the progress made to date.

Quick recap: What is the SMCR?

Last year on 7th March 2016, the FCA and PRA implemented a number of policy changes to increase individual accountability within the banking sector – for deposit takers and the largest investment firms (banks); this was in the form of The Senior Managers and Certification Regimes (SMCR).

Back in 2013, the Parliamentary Commission on Banking Standards (PCBS) put forth a series of measures they thought would improve the standards in financial services.

In conjunction, the FCA and the PRA acted upon these recommendations by introducing the Senior Mangers Regime (SMR), the Certification Regime (CR) and Conduct Rules. In addition, there were changes to the remuneration code and additional rules related to whistleblowing to tie in with the new regimes that came into effect last year.

In addition, the regulators also introduced rules for senior managers in insurers that came into effect at the same time.

Role of the regimes:

The SMCR regimes have an important role in the regulator’s continued focus on culture and governance within firms. In addition the regimes build upon initiatives to help the Financial Conduct Authority to identify, as well as assess, key senior individuals within firms.

Regulatory References & Conduct Rules:

Today, one year on from last year’s implementation, the SMCR rules relating to regulatory references also come into effect.

These rules relate to regulatory references for Senior Managers and staff in the Certification Regime, which includes staff that could cause ‘significant harm’ to either the firm or its customers or both e.g. investment advisers.

Today, 7th March 2017, is also the deadline for SMCR firms to have issued staff with certificates for the Certification Regime.

Whilst the Conduct Rules have already applied to Senior Managers and staff in the Certification Regime for the last 12 months, today these also apply to all other staff, except from those that perform purely ancillary functions.

FCA Reflections on the regime

In essence, the FCA has seen that the regimes have had the following impact and results over the last year:

Despite the progress that many firms have made with the regimes, the FCA recognises that cultural change within firms takes time and informs in their reflections that “there is still more to do” warning firms that they will “continue to keep a watchful eye on the progress that firms are making”.

Next Steps: Regime Extension

It was announced last year, before the implementation of the SMCR for the banking sector that the Bank of England and the Financial Services Act 2016 would look to extend the SMCR to all sectors of the financial services industry.

The FCA will now look to consult with the industry, firms and consumers on the proposals to extend the SMCR to all other firms with expected implementation to begin in 2018.

Related Reading:

News & Views News & Views

Read our latest articles, news and views affecting compliance and regulation in the UK Financial Services Industry.

Comment from the FCA:

“culture change takes time and there is still more to do.”

FCA News Story: Senior Managers and Certification Regime: one year on, 07 March 2017

Compliance Support from Compound Growth Ltd

Please contact our Compliance Support Team for a free no obligation discussion of your regulatory requirements and how our regulatory & compliance consultants can help your business move forward compliantly.

Send Email

Call by Telephone:

(020) 3813 2890