What Are The Aims Of The Senior Managers And Certification Regime?

When did SMCR come into effect?

7 March 2016Senior Managers Regime: approvals.

The Senior Managers and Certification Regime (SM&CR) came into force on 7 March 2016, and was extended in full to insurers on 10 December 2018.

It was introduced to support a change in culture at firms..

Who does the senior managers and certification regime apply to?

The Senior Managers and Certification Regime will apply to all FCA-regulated firms from 9 December 2019 this year. It replaces the current Approved Persons regime.

Who is subject to SMCR?

The SMCR has been in force for banks, building societies, credit unions and PRA-designated investment firms (Relevant Authorised Persons) since March 2016 and was extended to cover all Financial Conduct Authority (FCA) solo-regulated financial services firms on 9 December 2019. It has replaced the APER entirely.

What are the senior management functions?

1 A senior management function is defined in FSMA as: “… in relation to the carrying on of a regulated activity by an authorised person, if (a) the function will require the person performing it to be responsible for managing one or more aspects of the authorised person’s affairs, so far as relating to the activity, …

Can prescribed responsibilities be shared?

Prescribed Responsibilities should normally be held by one person, however, in limited circumstances, they can be held by more than one individual, if the firm can show that this is appropriate and justifiable: As part of a job share.

What is the aim of the SMCR?

The aim of SMCR is to reduce harm to consumers and strengthen market integrity by making firms and individuals at those firms more accountable for their conduct and competence. There are 3 key components which apply to financial service firms, the conduct rules, the senior managers regime and the certification regime.

What are the three types of SMCR firm?

The FCA has acknowledged that there are a range of different types of firm which will become subject to the SMCR, and it would not be appropriate to treat all firms in the same way. As a result, the FCA has effectively divided firms into three types: Limited Scope, Core and Enhanced.

Do senior managers need to be certified?

The first part of the legislation, the Senior Managers Regime, states that those at the top level must be FCA or PRA approved, before taking up a position and certified at least once a year. A company then assigns each senior manager a ‘statement of responsibilities’ leaving them in no doubt about their obligations.

How often should firms assess the fitness and propriety of senior managers once they have been granted approval under SMCR?

Firms must be satisfied that staff are fit and proper before making an application for their approval to the FCA. Once the individual is approved and in post, the firm must then assess their fitness and propriety on an ongoing basis, at least annually.

What is smf17?

SMF17 Money Laundering Reporting Officer (MLRO) – acting as the MLRO for the London branch including receipt assessment, and onward disclosure of SARs. Legislations and regulations – keep up to date with any changes to UK Compliance regulations and laws, issued via the FCA and the PRA.

What does SM and Cr stand for?

Senior Managers and Certification RegimeThe Senior Managers and Certification Regime (SM&CR) replaced the Approved Persons Regime. This changed how people working in financial services are regulated.

How many individual conduct rules are there?

There are two tiers of the Conduct Rules. The first tier – consisting of five rules – applies to everyone. The second tier – consisting of four rules – applies only to Senior Managers. The only exception here is that Senior Manager rule 4 also applies to all non-executive and executive directors.

Does SMCR apply to appointed representatives?

What if I’m an Appointed Representative? The SMCR does not currently apply to ARs, however the FCA could consult in the future on how the SMCR may be extended to ARs. An AR seeking individual authorisation will need to consider the SMCR in making an FCA application for standalone authorisation.

What are the SMCR conduct rules?

SM&CR: The conduct rulesYou must act with integrity.You must act with due skill, care and diligence.You must be open and cooperative with the FCA, the PRA and other regulators.You must pay due regard to the interests of customers and treat them fairly.You must pay due regard to the interests of customers and treat them fairly.

What are the aim of the senior managers and certification regime SMCR?

The SMCR is part of the UK regulators’ drive to improve culture, governance and accountability within financial services firms. It aims to deter misconduct by improving individual accountability and awareness of conduct issues across firms.

What are the 3 main elements of the senior managers and certification regime?

There are three main elements to the regime: (1) the senior managers regime; (2) the certification regime; and (3) conduct rules that apply directly to a firm’s workforce.

What are the senior manager functions?

Like all managers, the senior manager is responsible for planning and directing the work of a group of individuals. They monitor their work and takes corrective actions when necessary. Senior managers might guide workers directly or they might direct several supervisors, who in turn directly manage the workers.

Which rules govern the conduct of senior managers?

Individual Conduct Rules:Rule 1: ‘You must act with integrity’Rule 2: ‘You must act with due care, skill and diligence’Rule 3: ‘You must be open and cooperative with the FCA, the PRA and other regulators’Rule 4: ‘You must pay due regard to the interests of customers and treat them fairly’More items…