FCA Consults on Implementation Timeline for SM&CR Solo-Regulated Firms

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

• Press Release
• Consultation Paper (PDF)

Comment Due Date: August 14, 2020