FCA Consults on Implementation Timeline for SM&CR Solo-Regulated Firms
FCA proposed to extending implementation deadlines for the Certification Regime and Conduct Rules for the solo-regulated firms. The proposal is to extend the deadline from December 09, 2020 to March 32, 2021 for the date the Conduct Rules come into force, for submission of information about Directory Persons to the Financial Services Register, and for changing references in the rules to the deadline for assessing Certified Persons as fit and proper (which has been already agreed upon by HM Treasury). The comment period for this consultation will end on August 14, 2020. HM Treasury will lay a Statutory Instrument before Parliament to delay deadline to the Certification Regime until March 31, 2021, to give time to firms significantly affected by COVID-19 to make the needed changes.
If firms are able to certify staff and submit information about directory persons to the Financial Services Register earlier than March 2021 they should do so. FCA will still publish details of certified employees of solo firms starting from December 09, 2020 on the Financial Services Register as FCA expects that this published information will be of immediate benefit to consumers and firms. FCA also added guidance about how the Certification Regime applies during the transition period, if a firm chooses to certify staff before the new deadline. FCA also proposed to extend the implementation deadlines for Claims Management Companies by an equivalent period. This would mean that such a company receiving full authorization on or after December 09, 2019 would have just over 15 months after the date of its full authorization to fulfill the requirements. FCA expects accountable senior managers to ensure that all Certified Persons are fit and proper. Firms should not wait to remove staff members who are not fit and proper from certified roles. Similarly, accountable senior managers must ensure that conduct rules training is effective, so that staff members are aware of the conduct rules and understand how they apply to them in their jobs. The effective delivery of these programs will require planning, time, and effort.
All FCA solo-regulated firms authorized to provide financial services under Financial Services and Markets Act 2000 would be able to use the proposed extension. Appointed Representatives would also be in scope of the proposed extension to the reporting deadline for Directory Persons. The Certification Regime and reporting of Directory Persons do not apply to benchmark administrators. Hence, FCA does not intend to consult to move the deadline for benchmark administrators. Benchmark administrators have until December 2021 to train non-senior management staff in the Conduct Rules. The Senior Managers & Certification Regime (SM&CR) is designed to reduce harm to consumers and strengthen market integrity. By creating a system in which staff take responsibility for their actions, there is improved conduct at all levels and it is easy to understand who does what. The SM&CR also enables firms and regulators to hold people to account. It is a key part of the continuing focus of FCA on firm culture.
Related Links
Comment Due Date: August 14, 2020
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Dieter Van der Stock
IFRS subject matter expert; LDTI subject matter expert; accounting authority; risk management specialist
Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
