FCA urges firms to be ready for Senior Managers and Certification Regime

Ryan Bembridge

April 15, 2019

The Financial Conduct Authority has urged firms to get ready for the Senior Managers and Certification Regime, which comes into effect on 9 December 2019 for all the firms it regulates – including mortgage brokers.

The new rules, aimed at making senior managers accountable for their actions and how they influence others, has already been rolled out to banks and insurance firms but will be extended to 47,000 firms.

Jonathan Davidson, executive director of supervision – retail and authorisation at the FCA, said: “Senior leaders should view the regime as a catalyst to inspire positive culture change at their firms.

“The SM&CR is an important way to ensure that individuals at all levels within firms take personal responsibility for their actions.

“It is good for business when employees buy into a firm’s purpose, feel personal accountability and are inspired to speak up (and to listen).

“This can be encouraged through the new conduct rules. This kind of culture supports a healthy and inclusive workplace for employees, innovation and sustainability, and thoughtful identification and mitigation of risk.”

Under the regime, all Senior Managers must have a ‘statement of responsibility’ – which should be clear enough for everyone to understand what activities they are responsible and accountable for in the business.

Larger and more complicated firms must have ‘responsibility maps’ showing how the responsibilities of their Senior Managers fit together.

Firms are urged to prepare statements of responsibilities and responsibilities maps as early as possible.

The FCA said firms should prepare bespoke training plans and ensure staff understand the practical application of the specific rules which are relevant to their roles.

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