Senior manager rules won’t be relaxed for advisers: FCA

Senior manager rules won’t be relaxed for advisers: FCA

The Financial Conduct Authority’s director of supervision has said strict senior manager rules will not be loosened for advisers when the regime is extended to cover them.

Jonathan Davidson, who is responsible for retail and authorisations, said culture is “vital” for its regulation of firms and their conduct.

He said the senior managers and certification regime - which focuses on the role of individuals who hold key responsibilities in firms to ensure good practice within those firms - was an important part of how the FCA influences good culture.

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The regime came into effect in March and last year HM Treasury said it would be extending it to cover all financial services firms, including advisers, by 2018.

Speaking at the 2nd Annual Culture and Conduct Forum for the Financial Services Industry in London Mr Davidson said: “We hope to see more and more firms approaching the issue of culture with this sort of enthusiasm as the regime beds down over time, particularly as we begin to think about how the SMCR will apply to the other regulated firms not covered under the first round of implementation.

“We are cognisant of the diversity of firms this will bring under the regime, and proportionality will play a key role as we work to ensure the SMCR works well across all sectors.

“But the tenets of the regime – clarity, accountability and transparency – will not change – and our expectations around conduct, whether the firm is large or small, will remain high.”

He added that there is no “single right answer” for firms looking to improve their culture. “We realise how challenging and complex the topic is for firms and that there is no single right answer across firms,” Mr Davidson stated.

“In our supervision of individual firms what we’re looking for is firms recognising issues and taking robust, consistent and persistent steps to effect change.

“We want to see that firms are moving in the right direction; with indicators supporting the impression that progress is being made,” he added.