In preparing for the Senior Managers and Certification Regime, it is vital advisers and companies do not lose sight of the bigger picture.
This is because the regime will work best if it is approached as a culture change, rather than a tick box exercise, suggests Mark Turner, managing director of Duff & Phelps.
Also, companies that are ready before December 9 2019 will be allowing plenty of time to deal with any unforeseen issues.
Indeed, Mr Turner suggests companies would do best to proactively pre-empt any potential drawbacks, by positively embracing the new rules and ensuring that structures, reporting lines, policies and practices support the individuals being asked to be accountable.
He explains: “Perhaps most importantly, firms will need to ensure that their culture and tone from the top support the objectives of the regime, enabling both firms and their employees at all levels to enter this regime with confidence.
“To avoid the risk of not meeting the expectations under SMCR, firms should review their terms and conditions structure in plenty of time before implementation to bring all relevant staff into this.”
One of the first steps for a company to take will be to designate a senior individual within the firm as a project lead for SMCR, and put in place a structured plan of action to ensure that they have the required knowledge and resource to action, and deliver, the requirements prior to the deadline, says Paul Bruns, director of field compliance at SimplyBiz Group.
Mr Bruns says: “At this stage, the key things for firms to be doing is gaining an understanding of what SMCR is all about, the relevant senior manager function that will apply to them and, importantly, ensuring that the holders of any current controlled functions are the right people for those roles.”
But, he also suggests making sure the right people are attributed to the right functions is a good starting point, because there will be an automatic conversion of some of these functions and so it is important they are correct now.
He continues: “Undertake a review of your business, ensure that the right people are in the right roles and review the Financial Conduct Authority’s Financial Services Register to ensure it is accurate, as this is what the conversion will be based upon.
“Firms should also be considering future recruitment procedures as these will need to be more robust under SMCR.”
What some firms are doing already
According to Dominic Crabb, chief compliance officer at London & Capital, London & Capital has already started discussing who is responsible for what at senior management level.
He says: “We started with some sets of training for the senior managers and identified who the senior managers are, and have started training on what the regulation means and what it requires – the expectations on the company and on senior managers.