FCA Extends Implementation Timeline for SM&CR Solo-Regulated Firms

Senior Managers must ensure that Conduct Rules training is effective, to ensure that staff are aware of the Conduct Rules and understand how they apply to them in their jobs. FCA will produce further communication about its expectations. FCA highlights the if firms are able to certify staff earlier than March 2021, they should do so. Firms should not wait to remove staff members who are not fit and proper from certified roles. FCA will still publish details of the certified employees of solo firms starting from December 09, 2020 on the Financial Services Register. The Certification Regime and reporting of Directory Persons do not apply to benchmark administrators, so FCA does not intend to move the deadline for benchmark administrators. Benchmark administrators have until December 2021 to train non-Senior Manager staff in the Conduct Rules. According to FCA, COVID-19 pandemic will not prevent effective implementation of Conduct Rules training in these firms, thus FCA is not considering extending this deadline. 

Additionally, FCA recognizes that some benchmark administrators and Appointed Representatives have had to make temporary arrangements to cover absences. To provide flexibility to firms during pandemic, FCA issued a modification-by-consent to the 12-week rule, which will allow temporary arrangements for up to 36 weeks. FCA does not expect to receive notification from firms under Form D of the temporary arrangements. However, it is expected that these arrangements are clearly documented internally. Regulated firms that use Appointed Representatives to carry on regulated activity remain responsible for their Appointed Representatives and networks meeting FCA rules. Principals should continue to ensure that the:

• Controllers, directors, partners, proprietors, and managers of an Appointed Representative are fit and proper
• Appointed Representative is solvent and suitable to act for the firm
• Principal has adequate controls over the Appointed Representative’s activities
• Appointment does not prevent the firm from satisfying and continuing to satisfy the threshold conditions
• Principal is able to monitor and enforce compliance with relevant requirements

Related Links

• Extension of Implementation Period for Solo-Regulated Firms
• Expectations on Approved Persons Regime
• Overview of SM&CR Regime for Solo-Regulated Firms

Keywords: Europe, UK, Banking, Securities, SM&CR, COVID-19, Governance, Deadline Extension, Approved Persons Regime, Conduct Rules, FCA