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
Life insurance actuary; risk management and economic capital specialist
Jerome Ogrodzki
Insurance asset and liabilities modeling specialist; stochastic modeling expert
Previous Article
EBA and ESMA Issue Joint Response to EC Letter on Crypto-AssetsRelated Articles
EBA Publishes Standards on Disclosure of Investment Policy Under IFR
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
EBA Updates Filing Rules for Supervisory Reporting
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
APRA Finalizes Guidance for New Prudential Standard on Remuneration
The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.
OCC Updated LIBOR Self-Assessment Tool for Banks
The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).
TCFD Updates Guidance for Financial Disclosures on Climate Risk
The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
BCBS Report Examines Progress on Adoption of Basel III Framework
The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.
ACPR Implements Updates Related to DPM Version 3.1
The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.
EBA Note Examines Transition Risks of Benchmark Rates
The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.
OSFI to Communicate Next Steps on Climate Risk Policy in Early 2022
In a letter to the federally regulated financial institutions and pension plans, the Office of the Superintendent of Financial Institutions (OSFI) published a summary of the feedback received to the January 2021 discussion paper on ways to address climate risks.
