The FCA is reminding brokers to prepare for the Senior Managers and Certification Regime which comes into force on 9 December 2019
The FCA has already rolled out the SM&CR to banks and insurance firms and is extending the regime to the 47,000 broker firms it regulates.
The aim of the SM&CR is to establish healthy cultures and effective governance in firms by encouraging greater individual accountability and establishing a new standard of personal conduct. Senior managers will need to take responsibility not just for the decisions they make, but for how they influence others, encouraging a healthy culture from the top.
Under the regime, all senior managers must have a Statement of Responsibility – which should be clear enough for everyone to understand what activities the senior manager is responsible and accountable for in the business. Larger and more complicated firms must have Responsibility Maps showing how the responsibilities of their senior managers fit together.
Firms are urged to prepare Statements of Responsibilities and Responsibilities Maps as early as possible. The FCA published guidance in March to give firms practical assistance and information on preparing SoRs and Responsibilities Maps.
The FCA says firms should start by preparing their bespoke training plans and ensure staff understand the practical application of the specific rules which are relevant to their roles.
FCA executive director of supervision for retail and authorisations Jonathan Davidson says: “Senior leaders should view the regime as a catalyst to inspire positive culture change at their firms. The SM&CR is an important way to ensure that individuals at all levels within firms take personal responsibility for their actions.
“It is good for business when employees buy into a firm’s purpose, feel personal accountability and are inspired to speak up (and to listen). This can be encouraged through the new conduct rules. This kind of culture supports a healthy and inclusive workplace for employees, innovation and sustainability, and thoughtful identification and mitigation of risk.”
Mortgage Strategy reported in October about the responsibilities advice firm heads might have to sign up to when the SM&CR is expanded.