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FCA asks for feedback on SMCR compliance guidelines
11/10/2018 , News Team

The FCA has published new proposed guidance on the Senior Managers & Certification Regime (SMCR), related to “statements of responsibility” (SoRs) and “responsibilities maps”.

Firms have until 10 December 2018 to give feedback on the proposed guidance document. The deadline for asset and wealth management firms to be SMCR compliant is 9 December 2019, though it has been in force for banks since March 2016.

The aim of the regulation is to protect consumers and the integrity of markets by setting minimum standards of conduct for most staff, increasing senior manager accountability, and strengthening governance structures.

The new proposed guidance, released 11 November, states that SoRs should clearly outline what a senior manager is responsible and accountable for, and should be easy for staff and regulators to understand. A vast portion of the guidance is a series of rhetorical questions compliance teams can ask themselves when implementing the regulation at their firms.

“Ask yourself: Could someone who understands the type of business that you do, but doesn’t know how your firm is organised, understand what the individual Senior Manager is accountable for by reading their SoR?” the guidance asks.

It says that an SoR is different from a job description and did not need to cover competencies and skills, but what the role holder is accountable for. From the implementation date it will be a legal requirement for senior managers to maintain their SoR.

About 47,000 financial services firms will be affected by SMCR, with the vast majority of these having “core” requirements, while 300 have “enhanced” requirements, which the new guidance covers in more detail.

The guidance also covers “responsibilities maps”, another document firms will be legally required to update.

“It should be a practical document that is clear and easy for regulators and people who work for the firm to understand,” says the proposed guidance.

“Your Responsibilities Map should contain key information about governance bodies, senior management reporting lines and Senior Managers’ responsibilities. We require that this key information is presented at a legal entity level but if your firm is part of a group, it should show clearly how the firm relates to its group. Good Responsibilities Maps usually have a mixture of graphics and text and are easy to navigate and comprehend.”

It then goes on to say such maps should be neither “very long [and] complex” nor “very minimal”.

The proposed guidelines can be found here, and information on how to give feedback is here.

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