UK’s Senior Managers and Certification Regime (SMCR)

First introduced in the banking sector in 2016 in response to significant conduct failings and the 2008 financial crisis, the Senior Managers and Certification Regime (SMCR) is part of the UK regulators’ drive to improve culture, governance, and accountability within financial services firms. The SMCR aims to deter misconduct by improving individual accountability and awareness of conduct issues across firms, and to promote a culture where employees at all levels take personal responsibility for their actions, with good regulatory compliance practices central to its requirements. This resource offers the latest developments on the SMCR and our London team’s insights into them.

Insights

SMCR: Full Implementation for Solo-Regulated Firms Delayed to 31 March 2021 (02 November 2020)

The UK Financial Conduct Authority recently published Policy Statement 20/12, which sets out the final rules on the extension of the Senior Managers and Certification Regime implementation deadlines for the certification regime and conduct rules.

FCA Releases Guidance to Assist Solo-Regulated Firms in Fitness and Propriety Assessments, Staff Training (02 September 2020)

The UK Financial Conduct Authority recently closed its consultation (CP20/10) to extend the deadline for solo-regulated firms to conduct their first fitness and propriety assessments of certified staff and train all staff on the conduct rules, and updated its webpage with positive and negative indicators firms should consider when conducting the assessments and training. Firms should take action now to prepare for the full implementation of the Senior Managers and Certification Regime.

FCA Consults on Extending Senior Managers & Certification Regime Deadlines (21 July 2020)

The Financial Conduct Authority (FCA) began a consultation (CP20/10) on 17 July on the extension of the deadlines by which FCA solo-regulated firms must have first assessed the fitness and propriety of their certified staff, trained staff in the Conduct Rules, and reported directory person data.

SM&CR and COVID-19: UK Regulators’ Expectations (07 April 2020)

The UK Financial Conduct Authority and Prudential Regulation Authority have published statements setting out their expectations of dual-regulated and solo-regulated firms on their senior managers and certification regime requirements in the context of the coronavirus (COVID-19). They intend to provide flexibility to firms where they can and have made specific provisions in light of COVID-19.

SMCR Has Moved Up the Agenda, FT Adviser (29 October 2019)

Morgan Lewis partner Louise Skinner authored an article in FT Adviser about the upcoming implementation of the Senior Managers and Certification Regime (SMCR) for solo-regulated firms in the UK. In the article, Louise discusses the impact of SMCR thus far and best practices for firms preparing for compliance.

UK Financial Conduct Authority Publishes Final Rules on Extending SMCR to Solo Regulated Firms (20 August 2019)

Following its consultation earlier this year, the UK Financial Conduct Authority has now published a policy statement setting out its final rules for extending the Senior Managers and Certification Regime to solo-regulated firms. All solo-regulated firms will need to prepare to be compliant with the new regime by 9 December 2019.

UK Regulators Continue Focus on Cultural Accountability, Diversity in Financial Services Sector (26 July 2019)

In a global environment of heightened regulatory accountability and scrutiny, the Bank of England, UK Financial Conduct Authority, and Financial Stability Board have signalled their continued interest in promoting the need for improvement in culture, conduct, and diversity in the financial services sector. Against the backdrop of the Senior Managers and Certification Regime, and following recent commentary from these regulators, expectations relating to culture in the financial services sector are evolving.

Final Guidance Readies Solo-regulated Firms for SMCR Extension (10 May 2019)

Morgan Lewis partner Louise Skinner and associate Thomas Twitchett discuss the Financial Conduct Authority’s final guidance setting out its three-tiered approach, along with its expectations for Statements of Responsibilities and Responsibilities Maps, in relation to the extension of the Senior Managers and Certification Regime.

FCA Issues Final Guidance on Key Issues Ahead of SMCR Extension (02 April 2019)

The Financial Conduct Authority (FCA) has recently published its final guidance on statements of responsibilities, responsibilities maps, and its policy statement on the new FCA directory for financial services workers, ahead of the extension of the Senior Managers and Certification Regime to all FCA solo-regulated firms from 9 December 2019. This is part of the FCA’s plan to increase accountability in the financial services industry.

SMCR Update: UK Banking Standards Board Proposes Guidance on Regulatory References (14 February 2019)

With an eye toward addressing the many complex issues inherent in the preparation and consideration of regulatory references, the UK Banking Standards Board has prepared draft guidance for firms that focuses on three principles: fairness, proportionality, and consistency.

SMCR: FCA Proposes to Exclude Heads of Legal from Senior Manager Approval (04 February 2019)

The UK Financial Conduct Authority has proposed to exclude the head of legal function from the requirement to be approved as a senior manager under the Senior Managers Regime. It has also made further proposals in its consultation paper to optimise the Senior Management and Certification Regime, including by amending the intermediary revenue criterion for enhanced-tier firms, amending and clarifying the application of the Certification Regime, and extending the application of Senior Manager Conduct Rule 4.

UK’s Senior Managers and Certification Regime Extended to Insurance, Reinsurance Sectors (10 December 2018)

The UK’s Senior Managers and Certification Regime (SMCR) is extended to the insurance and reinsurance sectors as of today, December 10. A package of regulatory rules and standards, SMCR is designed to fundamentally change the culture of firms and improve standards by ensuring that key responsibilities are clearly assigned to individuals, who are personally accountable, and that staff in certain positions are fit and proper to perform their roles and comply with mandatory standards of behaviour. Originally introduced in the UK banking sector in 2016 in an effort to ward off another financial crisis, SMCR is now being rolled out to the insurance and reinsurance sectors, and will be rolled out further to remaining FCA-regulated firms in December 2019.

SMCR: FCA Proposes Guidance on the Statement of Responsibilities (12 November 2018)

The Financial Conduct Authority (FCA) proposed guidance on 11 October 2018 for formulating a Statement of Responsibilities for Senior Managers, ahead of the extension of the Senior Managers and Certification Regime (SMCR) to all FCA solo-regulated firms from December 2019. The FCA also published a consultation paper on 20 September 2018 on the application of SMCR to claims management companies, in light of it becoming the regulator of claims management companies from April 2019.

Back in the Boardroom for SMCR, IFLR (01 November 2018)

Morgan Lewis partner Louise Skinner and associate Tom Twitchett have authored an article in IFLR about the extension of the Senior Managers and Certification Regime (SMCR)

Insurers Must Act Now to Prepare for SMCR Extension (20 September 2018)

Morgan Lewis partner Louise Skinner has written an article in Insurance Day regarding the Senior Manager and Certification Regime extension, which will alter how most individuals working in the insurance sector are regulated from December 10.

UK Advisory, Conciliation and Arbitration Service Issues Guidance on Employment References (05 September 2018)

The Advisory, Conciliation and Arbitration Service has provided more comprehensive guidance for employers giving employment references in the United Kingdom. Regulated firms are also subject to additional regulatory reference rules.

SMCR Extension: FCA Publishes ‘Near Final’ Rules, Sets Implementation Date (10 July 2018)

The Financial Conduct Authority and Prudential Regulation Authority published policy statements on 4 July on the extended Senior Managers and Certification Regime, setting out near final rules for solo-regulated firms and final rules for insurers. The FCA confirmed the implementation date for FCA solo-regulated firms and has launched a consultation on introducing a public register of individuals working in financial services.

UK SMCR vs APR: Criminal Record Checks and the FS Register in the New Accountability Era (08 March 2018)

The Senior Managers and Certification Regime (SMCR), which came into force in March 2016 for UK banks, PRA-designated investment firms, and UK branches of foreign banks, changes the way in which individuals working in financial services are regulated. It was introduced to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence.

Proposals Announced to Extend Senior Management Responsibilities in UK Financial Services (21 December 2017)

Firms should establish implementation teams, create project plans, design procedures, and take several other measures to prepare for the new rules.

Senior Managers and Certification Regime 2018 Extension: FCA Consults (15 September 2017)

The Financial Conduct Authority has published a Consultation Paper containing its proposals to expand the Senior Managers and Certification Regime to all FSMA-authorised firms; the window for providing comments to the FCA ends on 3 November 2017.

Events

Senior Managers and Certification Regime: Preparing for Implementation of the Certification Regime and Final Aspects of the Conduct Rules (22 February 2021)

This event will build on the success of the previous seven summits that C&F has organised on the SMCR. All  of these were very well received by delegates, who rated the content and quality of the speakers very highly. This  edition  of the  summit will be delivered virtually, using our bespoke online event platform.

FCA Investigations and Enforcement: A Guide to Managing Regulatory Action (12 February 2020)

Partner Melanie Ryan will speak on "Developments in Combating Money Laundering and Financial Crime."