FCA Extends Implementation Timeline for SM&CR Solo-Regulated Firms
FCA announced that the HM Treasury has agreed to delay the deadline for solo-regulated firms to have undertaken the first assessment of the fitness and propriety of their Certified Persons under the Senior Managers and Certification Regime (SM&CR). The deadline has been delayed from December 09, 2020 to March 31, 2021. This will give firms that are significantly affected by COVID-19 pandemic the time to make the changes they need. FCA intends to consults on extending the deadline, from December 09, 2020 to March 31, 2021, for certain other requirements under the SM&CR. These requirements include the deadline for submission of information about Directory Persons to the Financial Services Register, the effective date of Conduct Rules, and the date by which relevant employees must have received training on the Conduct Rules. In addition, FCA has set out the expectations to help benchmark administrators and firms that are using the Appointed Representative arrangements to apply the Approved Persons Regime during the pandemic.
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
- 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
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.
FINMA Approves Merger of Credit Suisse and UBS
The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
MFSA Sets Out Supervisory Priorities, Issues Reporting Updates
The Malta Financial Services Authority (MFSA) outlined its supervisory priorities for 2023
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.
DNB Publishes Multiple Reporting Updates for Banks
DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.