l Frequently Asked Questions | SMCR Compliance

Frequently Asked Questions

Please see below for a list of frequently asked questions that we receive about SMCR and the training courses that we deliver. If you still cannot find the answer to your question, please do not hesitate to contact us.

  • What is SMCR?

    SMCR refers to the Senior Managers and Certification Regime. SMCR represents a significant shift in the way that the UK regulators supervise and monitor the activities of individuals that work in the financial services sector and/or conduct financial services related activities.

    In particular, the UK regulators have an ambition to improve ‘cultural behaviour’ at regulated firms and SMCR is a key component in this. SMCR affects almost everyone that works within financial services.

  • What is a ‘Solo’ firm?

    A ‘solo’ firm is a firm that falls into the remit of a singular UK financial services regulator – the Financial Conduct Authority (“FCA”). It includes firms performing investment business and consumer credit activity.

    This captures most regulated firms. A minority fall into the remit of the Prudential Regulation Authority as well as the FCA. These dual regulated firms (which include major financial institutions such as banks, building societies and insurers) are already subject to SMCR.

  • When does SMCR apply to ‘Solo’ firms?

    SMCR applied to ‘solo’ firms from 9 December 2019. There are certain obligations that will take effect from this date and these will require some advanced planning.

  • I don’t know what category of firm I belong to. How can I find out?

    ‘Solo’ firms are categorised in accordance with perceived complexity, and this determines how SMCR is applied. Most ‘solo’ firms will be either categorised as ‘enhanced’, ‘core’ or ‘limited scope’. Our online tool provides guidance on how to identify a ‘solo’ firm’s category.

  • Give me some examples of firms that are ‘Solo’ firms

    ‘Solo’ firms include:

    • Investment banks
    • Asset managers and funds
    • Fund platforms
    • Broker dealers
    • Market makers
    • Execution traders
    • Investment/financial advisers
    • Mortgage brokers and other mortgage intermediaries
    • Insurance brokers and other insurance intermediaries
    • Peer to peer lending platforms
    • Electronic money and payment institutions
    • Firms offering credit to consumers
    • Consumer hire firms
    • Payday lenders
    • Debt counsellors and debt adjusters
    • Pawnbrokers
    • Oil market participants
    • Service companies
    • Energy market participants

  • I understand that some staff will be Senior Managers, some will be
    Certified Persons and some will be subject to Conduct Rules. Which of a firm’s staff are affected by this?

    Broadly speaking, senior managers are those within a firm that perform key functions, including executive functions. Certified persons perform functions that do not fall within the ‘senior managers’ regime but nonetheless expose the firm to risk. It is possible for an individual to be both a senior manager and a certified person.All staff that engage with financial services, excluding some ancillary staff, are subject to the conduct rules.

    This is a significant development since the UK financial services industry has never before required most participants to adhere to a ‘code of conduct’. It is a regulatory requirement to ensure that affected staff receive training on – and understand – the conduct rules. Both our ‘toolkit’ and the training course ‘SMCR Overview’ provide additional detail on this framework.

  • How did SMCR Compliance develop its ‘toolkit’ offering?

    The toolkits were designed by lawyers and compliance experts at Robert Quinn Consulting to provide firms with all the compliance documents that need to implement SMCR in a pragmatic and cost-effective way. Robert Quinn Consulting has been advising clients on FCA compliance matters since 2007. The toolkits have been designed so that firms are able to have in place a robust documentary framework in place.

    The toolkit comprises a number of documents including: transition documents; policies and procedures; templates; amendments to existing documents; and forms. There are different toolkits for each of the three main ‘solo’ firm categories (‘enhanced’, ‘core’ and ‘limited scope’).

  • How did SMCR Compliance develop its online training modules?

    We wanted to make the online training product as straightforward as possible, ensure that the content of each course is proportionate to the training needs of each individual.

    As a result, within the three main ‘solo’ firm categories (‘enhanced’, ‘core’ and ‘limited scope’) we have created four training courses as follows:

    • SMCR Overview – this provides an overview of SMCR from the firm’s perspective. It is of use to anyone within the firm to understand the new regulations.
    • Senior Managers Regime – this is for anyone that has been identified as being a senior manager under SMCR, including senior managers that are also performing a certification function and people who want to understand the obligations of a senior manager.
    • Certification Regime – this is for anyone that has been identified as performing a certification function but is not a senior manager
    • Conduct Rules – this is for staff that are subject to the conduct rules framework but are neither a senior manager nor performing a certification function

    The Senior Managers Regime, Certification Regime and Conduct Rules modules end with a short multiple choice test.

    In addition, we created a ‘learning plan’, comprising all four courses, aimed at individuals who want to view all of the courses before rolling them out to other staff members.

  • How ‘user friendly’ are your courses?

    The courses are accessible immediately upon purchase. They can be viewed in multiple sittings – simply log back onto the course and start again from where you left off. The courses are visual i.e. you won’t need headphones or speakers. The courses take between 25 minutes and 45 minutes to complete.

  • I understand that staff will require vetting checks under SMCR. Can you assist with this?

    Under SMCR, there is an explicit requirement for firms to carry out criminal background checks and obtain ‘regulatory references’ from former employers. However there is also an implicit or best practice requirement to perform a range of other background checks on employers, for example when determining whether an employee is ‘fit and proper’.We have therefore partnered with an employment screening specialist that provides a cutting edge technological solution. Click here for further details.

  • I need some additional help. Can you assist?

    SMCR Compliance is backed by Robert Quinn Consulting Ltd, a professional regulatory consultancy firm. Robert Quinn Consulting Ltd can provide a range of consulting options to firms requiring practical and pragmatic support in implementing and maintaining their SMCR framework.

    Contact us should you need more help.

  • Will SMCR be ditched as a result of Brexit?

    SMCR is a uniquely UK initiative (i.e. it is not based on EU legislation) and the FCA considers SMCR to be a very important component in their drive to improve culture and standards at the firms that it regulates. Therefore SMCR is here to stay, regardless of the Brexit outcomes.