The Senior Managers and Certification Regime (SM&CR or SMCR) goes live today for buy-side organisations and other solo regulated firms*. The regime has been in operation for the past few years for banks, building societies, credit unions and branches of foreign banks operating in the UK and the largest investment firms regulated by the PRA and FCA.
Regulatory reporting controls, governance and ultimately sign off will be key to senior managers in these firms as they take on the additional responsibilities of SMCR. If this is you, what do you need to do from a regulatory reporting perspective? Here are five questions you should be able to answer:
- What category is my firm in? You need to understand the three types of categorisation under the senior managers regime (Limited Scope, Core or Enhanced) and the certification regime, as well as the conduct rules that will apply to the rest of employees’ monitoring and auditing activities.
- Have my Senior Management Functions (SMFs) been properly trained? Most functions will be the same as under the previous Approved Persons Regime but have they been trained to understand the responsibility and consequences of their actions?
- Is our governance now in line with SMCR? Are the right procedures & policies and controls in place for recording the implementations, steps and the decisions made by your firm to comply with the regulation?
- Have I mapped out my management responsibilities? Who is impacted (e.g. Head of Legal is not) and what Controlled Functions have transferred to SMFs?
- Am I protected? We have seen firms fined under various regulatory regimes such as MiFID and EMIR but there have been few penalties or consequences directly for the executives within those firms – yet. With SMCR making individual senior managers within firms accountable, our services can provide you with peace of mind that you have the right controls in place to meet your regulatory reporting requirements and reduce your regulatory risk.
Join in the conversation over on our LinkedIn.
More information: https://www.fca.org.uk/firms/senior-managers-certification-regime
*These include investment firms – brokers, securities firms, asset managers, financial advisers.