FCA Proposes Amendments to SM&CR for Banks and Insurers
FCA published the consultation paper CP19/4, which proposes several amendments to the Senior Managers and Certification Regime (SM&CR) for banking firms, insurers, and FSMA-authorized solo-regulated firms [FSMA: Financial Services and Markets Act 2000]. The proposals are designed to ensure the effectiveness of the SM&CR and support its objectives. Comments are requested by April 23, 2019. FCA will publish the rules and guidance in a policy statement in the third quarter of 2019.
CP19/4 will primarily be of interest to banking firms, Solvency II and large non-directive insurers, and enhanced solo-regulated firms. It will also be of interest to the incoming branches of overseas relevant firms as well as other groups, particularly legal professional bodies. It may also be of interest to other FSMA-authorized firms that the SM&CR will be extended to. This paper may also be of interest to consumers interested in how the SM&CR operates within relevant firms to enhance individual accountability. CP19/4 proposed amendments related to the following:
- Clarifying the application of the SM&CR to the Legal Function
- Amending the intermediary revenue criterion for the Enhanced regime
- Amendments to the Certification Regime
- Extending the application of Senior Manager Conduct Rule 4 (SC4) to cover non-approved executive directors
- Minor changes to regulatory forms
- Amendments to Handbook text on the detailed application of functions to Limited Scope firms to align this with our SM&CR near-final rules for solo-regulated firms and final rules for insurers
SM&CR was introduced for banking firms in 2016 and insurers in December 2018. It will apply to solo-regulated firms from December 2019. FCA made near-final rules on the SM&CR in July 2018 and final rules for insurers in September 2018. When consulting on these rules, a few areas requiring changes were identified. The proposals set out in CP19/3 are intended to provide extra clarity in certain areas and to help firms adjust to the SM&CR.
Related Links
Comment Due Date: April 23, 2019
Keywords: Europe, UK, Banking, Insurance, SM&CR, CP19/4, Solvency II, FCA
Featured Experts
Adam Koursaris
Asset and liability management expert; capable modeler; risk and capital specialist
Cassandra Hannibal
IFRS 17 subject matter expert; actuary; risk management and capital projection specialist
Jerome Ogrodzki
Insurance asset and liabilities modeling specialist; stochastic modeling expert
Related Articles
APRA Updates Validation and Derivation Rules in September 2020
APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
EC Proposes Frameworks for Crypto-Assets and Operational Resilience
EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.
ECB Publishes Opinion on Proposals to Amend Securitization Framework
ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.
FCA Consults on Regulation of International Firms in UK
FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.
MAS Amends Notice on Capital Adequacy Requirements of Banks
MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.
FCA to Begin to Move Firms to New Data Collection Platform RegData
FCA announced that it will move firms to RegData from Gabriel in the coming months in stages, based on the reporting requirements of firms.
ISDA Expects IBOR Fallbacks to be Effective by End of January 2021
ISDA issued a letter to regulators to flag that it now expects the supplement to the 2006 ISDA Definitions and the Interbank Offered Rate (IBOR) Fallbacks Protocol to be effective around mid- to late-January 2021.
APRA Reviews Repayment Deferral Plans, Identifies Best Practices
APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.
ESAs Assess Risks to Financial Sector After COVID-19 Outbreak
ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.
BoE Confirms Withdrawal of COVID Corporate Financing Facility
BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.
