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
EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.
EC Mandates ESAs to Propose Amendments to SFDR Technical Standards
The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.
EBA Examines Supervisory Practices, Issues Deposits Reporting Template
The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),
US Agency Publications Address Basel, Reporting, and CECL Developments
The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances
SEC Extends Comment Period on Climate Risk Disclosures
The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.
APRA Reduces Committed Liquidity Facility, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.
CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks
The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.
PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down
The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.
EBA Updates Standards for 2023 Benchmarking of Internal Approaches
The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.
EIOPA Responds to Stakeholder Views on Blockchain in Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.
