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FCA consultation (CP17/25) on Senior Managers and Certification Regime

26/07/2017

Key Proposals

The FCA proposes to:

apply a standard set of requirements to all FCA solo-regulated firms known as the ‘core regime’ for the SM&CR;
have extra requirements for a small number (fewer than 1%) of solo-regulated firms whose size, complexity and potential impact on consumers warrant more attention – these additions are called the ‘enhanced regime’; and
apply a reduced set of requirements for a group of firms we are defining as ‘limited scope’.

FCA has defined Senior Management Functions. Senior Managers – those that perform these functions – must be approved by the FCA before they can begin their role.
Every Senior Manager will need to have a Statement of Responsibilities that clearly says what they are responsible and accountable for.
There are also specific responsibilities that firms will need to give to their Senior Managers (known as Prescribed Responsibilities).
Firms need to certify individuals subject to the Certification Regime are ‘fit and proper’ to perform their role at least once per year.
A new set of Conduct Rules will apply to virtually all individuals within a firm.

As above plus:

Additional Senior Management Functions.
Additional Prescribed Responsibilities.
Overall Responsibility - Enhanced firms will need to make sure that there is a Senior Manager with overall responsibility for every area, business activity and management function of the firm.
Responsibilities Maps - Enhanced firms will need to have a single document that sets out the firm’s management and governance arrangements.
Handover Procedures - Enhanced firms will need to make sure that a person who is becoming a Senior Manager has all the information and material that they could reasonably expect in order to do their job.

The deadline for consultation responses is 3 November 2017.

The exact date for the commencement of extension of the regime is not yet known – it will enter into force during 2018.

Key contacts