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
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Dieter Van der Stock
IFRS subject matter expert; LDTI subject matter expert; accounting authority; risk management specialist
Previous Article
EC Proposes Amendments to Benchmarks RegulationRelated Articles
APRA Sets LAC for D-SIBs, Proposes to Enhance Crisis Preparedness
APRA issued a letter on the loss-absorbing capacity (LAC) requirements for domestic systemically important banks (D-SIBs) and published a discussion paper, along with the proposed the prudential standards on financial contingency planning (CPS 190) and resolution planning (CPS 900).
EC to Review Macro-Prudential Rules while ESRB Assesses Policy Stance
The European Commission (EC) launched a call for evidence, until March 18, 2022, as part of a comprehensive review of the macro-prudential rules for the banking sector under the Capital Requirements Regulation (CRR) and Directive (CRD IV).
FSB Sets Out Good Practices for Crisis Management Groups
The Financial Stability Board (FSB) published a report that sets out good practices for crisis management groups.
APRA Penalizes Heritage Bank for Incorrect Reporting of Capital
The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.
OSFI Releases Annual Report 2021-2022
The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.
OSFI Updates Timeline for Implementation of Certain Basel Rules
Through a letter addressed to the banking sector entities, the Office of the Superintendent of Financial Institutions (OSFI) announced deferral of the domestic implementation of the final Basel III reforms from the first to the second quarter of 2023.
EC Defers Adoption of Regulatory Standards for Disclosures Under SFDR
EIOPA recently published a letter in which EC is informing the European Parliament and Council that it could not adopt the set of draft regulatory technical standards for disclosures under the Sustainable Finance Disclosure Regulation (SFDR) within the stipulated three-month period, given their length and technical detail.
FCA Releases MIFIDPRU Application Forms and Third Set of Rules on IFPR
The Financial Conduct Authority (FCA) published the third in a series of policy statements that set out rules to introduce the UK Investment Firm Prudential Regime (IFPR), which will take effect on January 01, 2022.
APRA Finalizes Capital Adequacy Standards for Banks
The Australian Prudential Regulation Authority (APRA) published, along with a summary of its response to the consultation feedback, an information paper that summarizes the finalized capital framework that is in line with the internationally agreed Basel III requirements for banks.
CPMI-IOSCO Seek Comments on Access to Central Clearing and Portability
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a consultative report focusing on access to central counterparty (CCP) clearing and client-position portability.
