Regime to extend after rolling out to banks and insurance companies
The Financial Conduct Authority (FCA) is today reminding FSMA authorised firms to start preparing for the onset of the Senior Managers and Certification Regime (SM&CR).
After rolling out to banks and insurance firms, the regime will next extend to the 47,000 firms the FCA regulates on 9 December.
Aimed at establishing healthy cultures and effective governance in firms by encouraging greater individual accountability and establishing a new standard of personal conduct, senior managers will need to take responsibility not just for the decisions they make, but for how they influences others, the FCA said.
All senior managers need to prepare a ‘statement of responsibility', while larger, more complicated forms must create ‘responsibility maps' showing how senior managers fit together. Guidance on this can be found here.
The SM&CR is hinged on five conduct rules: 1) Act with integrity 2) Act with due care, skill and diligence 3) Be open and cooperative with the FCA 4) Pay due regard to the interest of customers and treat them fairly 5) Observe proper standards of market conduct.
Firms are expected to prepare bespoke training plans and ensure staff understand the practical implementation of these rules. You can follow the handbook here.
A guide for solo-regulated firms can be found here.
'Good for business'
"Senior leaders should view the regime as a catalyst to inspire positive culture change at their firms. The SM&CR is an important way to ensure that individuals at all levels within firms take personal responsibility for their actions," said Jonathan Davidson, executive director of supervision (retail and authorisation) at the FCA. "It is good for business when employees buy into a firm's purpose, feel personal accountability and are inspired to speak up (and to listen). This can be encouraged through the new conduct rules. This kind of culture supports a healthy and inclusive workplace for employees, innovation and sustainability, and thoughtful identification and mitigation of risk."
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