Financial Conduct Authority  

Advisers warned not to put SMCR on back-burner

Mark Turner, managing director of compliance and regulatory consulting at Duff & Phelps, warned the FCA's extension was not an invitation for firms and their staff to act in a way that was not compliant with the conduct rules. 

Mr Turner said: "Whilst many firms may welcome the opportunity to delay training and assessment of staff, they should be mindful of the risks associated with doing so.

"The FCA expects individuals working within regulated firms to conduct themselves appropriately at all times, regardless of this extension.

"By delaying training or fit and proper assessments firms are increasing the risk that staff don’t know what is expected of them, and ultimately that some individuals might not be fit and proper."

Mr Turner warned there would "no doubt" be investigations into poor behaviour as the industry emerged from the coronavirus crisis and individuals' actions become subject to "intense scrutiny".  

The SMCR was introduced to banks in 2016, but was rolled out to the wider financial services industry last December in the hope it would strengthen market integrity by making individuals more accountable.

Last year the FCA warned many firms in the banking sector were still often unable to explain what a conduct breach looked like in the context of their business.

As a result the watchdog announced it would be upping its supervision of how companies are embedding conduct rules and were meeting their responsibilities under the SMCR. 

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