So how will the changes it brings affect single regulated firms – and what do they need to do to get appropriate systems and controls in place in good time? In this first article, we look at what SM&CR is and how it affects your organisation, with our next article focusing upon conduct rules (with more to follow).SM&CR aims to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence.
Specifically, SM&CR aims to encourage a culture in which staff at all levels take personal responsibility for their actions, and to ensure firms and their staff clearly understand – and can demonstrate – where responsibility lies.
Critically, SM&CR aims to embed personal responsibility into the functions held by the Boards and Senior Managers of regulated firms. There will be three tiers of firm affected under the SM&CR:
Core: firms in this tier will have to comply with the baseline requirements of SM&CR.
Enhanced: this will apply to a small number of firms whose size, complexity and potential impact on consumers or markets warrant more attention. These firms will have additional requirements.
Limited scope: this will apply to firms that already have exemptions under the Approved Persons Regime. These firms will be exempt from some baseline requirements and will typically have fewer senior management functions.Senior Managers and Certification Staff will need to have been trained and abide by the Conduct Rules from the start of the new regime. Firms will have 12 months to put in place processes to comply with the training and reporting requirements and train their other staff on the Conduct Rules.
SM&CR defines prescribed responsibilities that each firm must review and allocate to a member of the Senior Management team. This document is known as the Management Responsibilities Map, a firm is required to maintain a responsibilities map that outlines the areas of responsibility that is kept up to date.
Each individual is required to hold a Statement of Responsibility that builds on the responsibilities map and outlines the areas the individual is personally responsible for. This will be augmented by a Handover Document that must be kept up to date to account for a planned or unplanned succession.For Senior Managers, the core concepts that affect individual accountability are as follows:
The PRA and FCA have established a combined list of Senior Management Functions (SMFs) requiring regulatory pre-approval and who are subject to the SMR.
Certification covers specific functions that aren’t Senior Management Functions but can have a significant impact on customers, the firm and/or market integrity
SM&CR requires firms to evidence how they have established that an individual is fit and proper to carry out the Senior Management or Certified function.
Upon completing this course your learners will be able to define the key elements within GDPR, understand the penalties, know the importance of consent, how they play a role and what to do in the event of a personal data breach.
Firms are required to train relevant staff on how our Conduct Rules apply to their role and a Senior Manager is required to be allocated the personal responsibility for this. Learning Pool’s SM&CR module demonstrates how your organisation and staff can ensure compliance. Senior Managers are responsible for compliance, and it’s very important that they’re aware of this as they are now more accountable for the actions of the business as a whole.
Learners will be certified, compliant and will understand the importance of the certification regime, the FCA’s approach to implementation and how it replaces the current Approved Persons Regime (APR).Key learning within this module is categorised into articles focusing on:
To find out more about getting your staff ready for SM&CR, contact us and get your 7 day free trial.
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