Broking Business Winter 2019/2020: SMCR – It’s here
Read time: 2 mins
Service: Internal audit & controls Sector: Financial services
The document’s key objectives are to define and confirm accountability for senior people in firms (clarifying their responsibilities), and make sure key individuals are well-skilled and capable of performing their roles.
The FCA has taken a proportionate approach, and most firms will need to comply with the core requirements.
SM&CR Check ListMake sure you’re where you need to be by reviewing your progress against our SM&CR check list.
By now, you should have:
- Reviewed your governance framework, confirmed all areas of the business are well accounted for and that there is sound governance in place with no gaps.
- Confirmed the automatic transition of senior managers from the Approved Persons (the previous regime) and made any submissions, as required to the FCA e.g. for the nona executive chair.
- Allocated Senior Management Functions (SMFs) and Certified Functions (CFs) to the appropriate individuals (confirming they are fully aware and have agreed their responsibilities).
- Allocated prescribed responsibilities to Senior Managers, where applicable.
- Compiled clearly-articulated Statements of Responsibilities detailing what Senior Managers are accountable for.
- Trained those allocated SMFs and CFs on the conduct rules.
- Engaged HR, made a plan and prepared the firm for SM&CR ‘business as usual’ processes.
For Enhanced firms:
- Additional functions and responsibilities to be allocated for Enhanced firms:
- Requirement to create and maintain Responsibilities Maps
- Complete and retain up to date handover procedures
Actions for the next 12 months:
- Have procedures to maintain and review regulatory references and criminal checks for Senior Managers
- Senior Managers to be able to demonstrate ‘reasonable steps’
- Conduct the first suite of annual certification checks for Senior Managers and Certified Function holders.
- Complete firm-wide training on the conduct rules (tailored and specific to staff as required)
- Set up processes to onboard new Senior Managers and Certified Function holders:
- Employment / onboarding procedures for requesting and checking
- regulatory references, criminal checks
- Processes to review and update Statements of Responsibilities
- Continuous training in conduct rules for firm staff and new starters
- Ensure all conduct rule breaches are identified, recorded and reported appropriately.