l What is SMCR Legislation? | SMCR Compliance

About SMCR

The UK Parliament enacted SMCR legislation in response to the 2008 banking crisis and significant conduct failings such as the manipulation of LIBOR.

The FCA’s increased focus on ‘culture’ and individual conduct and personal accountability goes beyond the SMCR legislation and represents a key shift for them.

Viewed through the SMCR lens, this includes:

Encouraging a culture whereby staff at all levels take personal responsibility for their actions

Ensuring firms and staff clearly understand and can demonstrate where responsibility and accountability lies

The new regime

SMCR superseded the Approved Persons Regime on 9 December 2019. At a high level, firms need to:

Identify employees undertaking Certification Functions, which includes those employees who interact with clients, are material risk takers, are proprietary or algorithmic traders or who perform a significant management or supervisory role

Introduce new Conduct Rules, which are similar to the previous FCA Statements of Principle for Approved Persons, that apply directly to most (if not all) employees within a firm

Ensure timely reporting to the FCA for Senior Manager appointments and any conduct rule breaches by employees

Ensure accurate and timely information is posted on the new FCA Directory

Implement a formal fitness and proprietary assessment that requires a number of due diligence checks on an initial and ongoing basis for both Senior Managers and Certified Function holders

Implement a suite of new written policies and procedures that document a significant number of new requirements that SMCR brings into play

Identify Senior Managers who are personally responsible for the areas of business that they manage

Develop and apply a more formal training programme

Learn more

FCA Classification

What you are required to do under the SMCR depends on whether your firm is classified as Limited Scope, Core or Enhanced. If you are unsure what category your firm is please contact us or use our helpful diagram from the FCA below.

Select your type of firm

Click on your type of firm below, to learn more about our complete range of services which will ensure that you are SMCR compliant.

Limited Scope Firms

Core Firms

Enhanced Firms