On 9th December 2019 the FCA implemented the Senior Managers & Certification Regime to all regulated firms. This is arguably the biggest change they have made to their regulations since they took over the regulation of financial services in April 2014, particularly for credit brokers in the home improvement industry.
This regulation has been successfully used within the banking industry for over 3 years so the FCA took the decision to introduce it to all firms they regulate in the UK to allow them to increase their oversight and encourage firms to clearly define roles & responsibilities.
There are a number of tasks that you should have already completed prior to the 9th December implementation date:
- Identified whether your business is a limited or core scope firm.
- Established who falls under the senior managers and certification regime within your business.
- Ensured that all of your senior managers have been approved by the FCA.
- Created a statement of responsibility for all senior managers and, if you are a core scope firm, assigned the prescribed responsibilities.
- Trained senior managers on tier 1 and tier 2 conduct rules.
- Trained certification regime staff on tier 1 conduct rules.
- Understood and implemented the necessary processes relating to fitness & propriety assessments, regulatory references, and criminal record checks.
There are some additional steps you will need to take over the next 12 months to fully implement SM&CR.
By the 9th December 2020 you must:
- Conduct fitness & propriety assessments on all senior managers and certification regime staff and repeat this at least annually.
- Issue senior managers and certification regime staff with a certificate after each assessment to evidence that they are fit and proper to carry out their roles and responsibilities.
- Register certification regime staff with the FCA via the Connect system (these people will not be approved by the FCA).
- Train all relevant staff, such as sales representatives and fitters/installers, on the tier 1 conduct rules.
- Ensure that any new staff are captured by the senior managers or the certification regime where appropriate and that they receive the necessary training on the conduct rules.
If you have yet to begin your preparations for SM&CR then please contact your CCS Business Development Manager or our Compliance Manager, Lewis Jenkinson, by calling our head office on 0845 120 6666 / 01772 453 888.
The FCA has published two podcasts about SM&CR covering 1) Certification & Regulatory References and 2) Conduct Rules. Go to https://www.fca.org.uk/media-library and then click the ‘audio’ box to view all podcasts.