Q: What are the top mistakes in implementing the Senior Managers and Certification Regime?
A: Solo regulated companies are in a great place to learn key lessons from banks and insurers who have already implemented the SMCR.
One of these learning experiences is being able to spot some of the likely mistakes, gaps and misconceptions your company will encounter on the road to compliance with the new regime.
So here are the top five mistakes companies could make in implementing SMCR:
1) Failing to effectively allocate responsibilities to the right people.
Having a gap where no one has responsibility, or where someone is not aware they are responsible, is one of the most likely risks a company will face.
Make sure accountability has been allocated to the most senior and appropriate person, and that everyone is up to speed about their individual responsibilities and the expectations relating to their role. Consider where there may be shared responsibilities, and how appropriate that is, ensuring there is clear documentation on how the responsibilities are assigned.
2) Thinking allocation and form-filling are enough.
Allocation of responsibilities needs to be at the top of your list, but do not forget that the key to being compliant will be embedding the regime and ‘reasonable steps’ in your company, not just filling out the paperwork.
3) Neglecting that crucial supporting evidence.
When it comes to regulation – whether it is SMCR or any other piece of Financial Conduct Authority regulation – I always tell my clients: ‘evidence is king’.
Whatever you are doing, it is essential that you record and evidence your rationale and your justification for your decisions. There is a danger some companies will forget about those records in the midst of other SMCR requirements.
4) Forgetting about the certification regime.
Because it applies to lower risk jobs, the certification regime can be overlooked compared with the senior manager regime. But the certification regime population in many companies is often bigger, therefore it may require more time and resource to implement and manage.
You will have another 12 months after the senior managers deadline to certify all the relevant people, but that is not a lot of time to embed the regime and train everyone in line with their job role. Our advice? Start now.
5) Thinking of December 9 2019 as your go-live date.
Everyone knows that even the best-laid plans encounter problems. No matter how well you have prepared, things will go wrong.
So it is crucial you set yourself a deadline before the December 9 implementation date to go live with SMCR, giving you time to iron out inevitable issues in time.
That way, when the implementation date rolls around you can be confident you are fully compliant.
Lorraine Mouat is associate director at TCC