Q. How can I be sure that my company is ready for the the Senior Managers and Certification Regime?
A. Over the past 12 months, it has been impossible to avoid hearing about the SMCR, which arrives on December 9.
As with so many wide-scale regulatory changes, various commentators have told us that meeting the new requirements will take everything from a complete restructure of your policies and procedures, to making barely any change to your existing way of working.
The senior managers within your company play a crucial role in demonstrating that they are accountable and responsible for their part in delivering effective governance.
This includes taking personal responsibility and being accountable for their decisions and exercising rigorous oversight of the business areas they lead.
The Financial Conduct Authority wants all companies to develop a “culture of accountability” at all levels and for senior individuals to be fully accountable for defined business activities and material risks.
The aim of the SMCR is to reduce harm to consumers and strengthen market integrity by creating a system that enables companies and regulators to hold people to account.
So, in preparation for the SMCR and to ensure a smooth transition to the new regime, you should have determined your company type and whether you will be classified as ‘core’, ‘limited’ or ‘enhanced’ under the new regime.
Consider the structure of your company and identify the personnel that will take responsibility for senior management functions and exactly what those functions will be for each person.
Complete and submit the paperwork required in respect of approved persons. And if required, make the necessary applications to the regulator to appoint, change or remove individuals.
Allocate and define who will hold prescribed responsibilities.
Ensure each senior manager holds a clearly defined statement of responsibilities and identify and list the individuals within your company who will carry certified functions.
You should have carried out tier one training for certified persons, tier two training for senior managers and ensured conduct rules training is taking or has taken place for all senior managers and certified personnel, and that you have evidence to demonstrate this.
Additionally, the conduct rules training must be relevant to the role that the member of staff undertakes within your company.
Personally, I believe that the adoption of the SMCR regulation will need work from companies.
However, with the right support in place, meeting the challenges posed by the SMCR should be perfectly achievable for most advice companies.
Mark Greenwood is director of compliance services at The SimplyBiz Group