Time remaining for SMCR compliance deadline for solo-regulated firms:
It’s been over a month since the senior managers and certification regime landed on 9 December, so what do you need to really focus on now? The important thing for firms to remember is that rolling out SMCR is not a one-off, tick-box exercise.
Obligations and embedding the SMCR are ongoing and the FCA will expect compliance in spirit as well as observance of the letter of the regulations. Firms will know what category of SMCR firm they are (enhanced, core or limited scope) and which staff are senior managers, certification staff or conduct rule staff.
What can firms do to properly embed the regime into their day to day operations? One of the key issues is to ensure you communicate what the regime means for your firm. Think about the purpose of your firm, what it stands for, what values it holds.
On the basis of your senior managers’ statement of responsibility and responsibility map (if you have one. Most firms we have been dealing with do, even if it is not a formal obligation) try to make sure your people are aware of the specific responsibilities held and reporting lines. This regime impacts everyone in the organisation in terms of the conduct rules. In our experience most firms apply the conduct rules to all staff to create a level playing field where everyone has skin in the game.
What we have been seeing, as firms have prepared for the regime, is an increasing focus on what good conduct and what a healthy culture actually means to their firm. The FCA’s commentary on non-financial misconduct and speaking up has encouraged firms to review their expectations of behaviours of staff and how leaders of firms set appropriate examples and standards. This regime is all about greater personal accountability for people’s actions.
On a practical and operational level, we have seen firms reviewing their training and competence arrangements to synchronise more closely with their appraisal process. They have also been sharpening up their recruitment and on boarding process, taking the opportunity to consider what due diligence they want to do on new recruits around referencing and background check.