The SMCR Checklist

The Senior Managers and Certification Regime is now in its seventh month. As firms continue to adjust to the first phase of this new regulatory landscape, we set out the key changes coming up over the next 12 months and how you should be planning for them.

October 2016: Annual Submission for Notifying Breaches 

Firms must now notify the FCA if any disciplinary action is taken against Conduct Rules staff where it relates to action, failure to act or circumstances that amount to a breach of the FCA’s Code of Conduct. 

An annual submission must be made to the Regulator at the end of October each year, via the GABRIEL reporting system. Uniquely the first annual submission, due on 31 October 2016, will only apply to the reporting period 7 March 2016 to 31 August 2016. 

There will also be no requirement in the first annual report to record disciplinary action against those employees who will not be subject to the Conduct Rules until March 2017.  

What do you need to do?

  • Implement processes for identifying all Conduct Rules staff that have been subject to disciplinary action (including formal written warnings, suspension or dismissal)
  •  Analyse whether any disciplinary action taken between 7th March 2016 – 31st August 2016 relates or could relate to a breach of the Code of Conduct 
  • Record rationale for reporting/not reporting disciplinary action taken against Conduct Rules staff to the Regulator
     

7 March 2017: Deadline for issuing certificates to Certified Staff

By 7 March 2017, firms must issue certificates to employees who will be performing FCA significant harm functions, to certify that they are fit and proper to perform their role.

Whilst many firms have already identified their certified employee population, a detailed review of role-specific qualification, training and competence requirements must now be conducted. By early next year, employers should be comfortable that their certification staff meet any role-specific regulatory requirements, or they may find themselves in a difficult position when 7 March arrives.  

What do you need to do?

  • Review all current certified roles and identify qualification, training or competence requirements for each position
  • Finalise an annual Fitness and Propriety Assessment Policy
  • Assess fitness and propriety of all certified staff and record decisions
     

7 March 2017: Deadline for Implementation of New Regulatory References 

The FCA has very recently released its Policy Statement on regulatory references. Firms will need to ensure that they are ready to implement the new regulatory reference rules on 7 March 2017. This will include seeking references from all previous employers of a prospective employee in the last six years, irrespective of the firm type or their regulated status.

What do you need to do?

  • Review current referencing policies, procedures and templates and revise these to comply with the new regulatory reference rules
  • Implement systems to update regulatory references where new relevant information come to light
  • Provide training to HR staff on issues associated with providing and obtaining regulatory references, where appropriate
     

7 March 2017: Application of Conduct Rules to staff who are not Senior Managers or Certification Staff

From 7 March 2017, the Conduct Rules will apply across firms to all non-ancillary staff. There is an obligation on employers in advance of this date to inform their employees about the application of the rules, how they work in practice and the consequences of breaching them. 

  • Identify all non-ancillary staff working within the firm who will be subject to the Conduct Rules
  • Provide conduct rules training across the firm to all relevant employees and explain the potential consequences of a breach 

Some recent updates on the SMCR can also be found on the PRA website: http://www.bankofengland.co.uk/pra/Pages/publications/280916.aspx and the FCA website: https://www.fca.org.uk/news/press-releases/fca-proposes-new-measures-maintain-firms-focus-culture 
 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.