As you’ll know the FCA are extending the SM&CR to all FSMA authorised firms on 9 December 2019. The SM&CR sets a new standard of personal conduct for everyone working in financial services and enhances senior management accountability. Under the SM&CR, all Senior Managers must have a Statement of Responsibilities (SoR). In addition, all enhanced firms must have a Responsibilities Map.
Today the FCA has published final guidance to provide practical assistance and information to solo-regulated firms when preparing their Statements of Responsibilities and Responsibilities Maps, including examples of good and poor practice. This guidance is designed to be read alongside the Guide for FCA solo-regulated firms. Please note this is very helpful guidance which should help firms with their Senior Managers Statement of Responsibilities (see Chapter 2). It also provides useful questions which will help you with this process. Similarly it will help enhanced firms with their Responsibilities Map (see Chapter 3) and again provides useful questions that will aid this process. Examples are also provided.
Finalised Guidance
In October 2018, FCA consulted on this proposed guidance and have made some revisions following the feedback they received (FLA responded – see attached). If you would like to see FCA’s feedback statement that can be found here.
The final guidance aims to help all FCA firms clearly set out Senior Managers’ responsibilities through SoRs. ‘Enhanced’ firms will also be able to use it to produce Responsibilities Maps which show how their firm is managed and governed. The guidance builds on the information FCA published in the SM&CR Guide for solo-regulated firms (refer above).
Who this applies to
This guidance is developed for FCA solo-regulated firms, subject to the SM&CR. The guidance may also be of interest to firms regulated by the PRA and FCA, subject to the SM&CR. For example, dual-regulated insurers, banks, building societies and credit unions. You may find this guidance useful when preparing new Statements of Responsibility and Responsibilities maps, or reviewing existing ones.
What should Senior Managers do?
FCA say Senior Managers should prepare early, using the opportunity to create and maintain healthy firm cultures where people do the right thing and take responsibility for consumer outcomes. This includes taking individual accountability and improving staff propriety, skill and capability.
What are the main tasks to be completed before implementation of the SM&CR on 9 December?
• Ensure that individuals who require approval under the existing Approved Persons Regime are approved in
appropriate controlled functions
• Create Statements of Responsibilities and identify the firm’s Certification staff
• Train Senior Managers and Certification staff on the conduct rules
We will further analyse this guidance and discuss it further at future committee meetings.