TMA has warned that advisers looking to ensure that their firm is compliant with the upcoming Senior Managers & Certification Regime (SMCR) need to complete any final preparations now.
The SMCR will replace the current Approved Persons Regime across the rest of the financial services sector on 9 December 2019.
According to TMA, there are five key areas advisers need to address ahead of 9 December:
Familiarise yourselves with the new SMCR requirements. Senior Managers need to make sure that all staff clearly understand the new rules and their objectives before the deadline by reading through the FCA’s guide on this topic;
Identify what type of firm you are. There are three categories: Enhanced, Core and Limited Scope. The size and structure of your firm will determine what you need to do under the new rules, so firms will need to assess which category they fall into based on the rules. Most intermediary firms will be subject to the ‘Core’ regime;
If you’re a Senior Manager such as a Director, you will need to create a ‘Statement of Responsibilities’. This should clearly outline your role and responsibilities as a Senior Manager for the FCA and others in your firm to understand. As part of this, firms will also need to assign Senior Manager(s) in charge of the Prescribed Responsibilities as set out by the FCA to ensure they are accountable for key conduct risks;
Identify members of staff who are subject to the Certification Regime (i.e. those working in roles with qualification requirements, such as mortgage advisers) and consider what processes need to be put in place to carry out assessments on these staff to ensure they are fit and proper to perform their roles. Assessments need to be carried out on a continual basis, and examples could include regular training sessions or quarterly one-on-one reviews;
Make sure that all staff familiarise themselves with the new Conduct Rules and consider how to adequately train them on these. Split into two tiers, the first is a general set of rules called ‘Individual Conduct Rules’ which will apply to most employees in a firm, including those that are subject to the Certification Regime. The second tier of ‘Senior Manager Conduct Rules’ applies to senior managers only.