l FCA Release Stocktake Report | SMCR Compliance

FCA releases “stocktake report” on SMCR ahead of December extension

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The FCA has published a report on the findings of their review into the embedding of the Senior Managers and Certification Regime in the banking sector, which was introduced for deposit-taking firms and dual-regulated investment firms in March 2016.

The FCA’s findings provide guidance fore the rest of the 60,000 regulated firms in the financial services industry, which will need to implement SMCR by 9 December 2019.

“The industry has made a concerted effort to implement the regime. Most firms are taking actions to move away from basic rules-based compliance towards embedding the regime in the organisation.”

The FCA noted that SMCR regulations led to “unintended consequences” for a small number of firms, such as a “culture of fear” and recruitment challenges.

“There is evidence that processes and controls on approvals of new products and businesses have been tightened,” the FCA said. “This has potentially contributed to firms being more risk averse and considered around innovation initiatives. However, if firms get the balance right, we don’t see this as a negative outcome.”