Independent review and analysis

Senior Manager & Certification Regime comes of age – what next?

It is just over 2 years since the FCA Senior Manager & Certification Regime [SM&CR] was implemented for banks and deposit takers. Since then, the regulator has continued to embed cultural changes and strengthen market accountability with the objective of minimising consumer harm.

There were, therefore, no surprises that the recently issued policy statement extending the reach of SM&CR to insurers and asset and wealth management firms contained no material changes from the original consultation. Additionally, the FCA has already stated that Claims Management Companies [CMCs] will be covered by the regime and whilst they will be the subject of a further consultation they should expect little change from what already exists – one regulator, one set of rules driving common ethical standards across all regulated firms.

The lack of significant change in the near final rules compared to the consultation paper clearly signals the FCA direction of travel and firms have received significant notice of intent. There can, therefore, be no excuse for not being fully ready by the relevant deadlines and firms should not expect any leniency if they fail to achieve timely and effective SM&CR implementation.

As a result of our work helping firms implement effective SM&CR, we have concluded that many firms fail to understand the amount of work and time involved in becoming SM&CR compliant.

In our experience, firms often fail to appreciate that all staff, except those in ancillary functions with no consumer contact, are caught by the rules. We believe that a successful SM&CR outcome is dependent upon implementing good cultural foundations and sticking to robust implementation timelines.

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