Community

31Mar2016

Blog : SM&CR ?  It’s getting a bit slippery out there!

A new piece of legislation came into force at the beginning of March.  The government, as promised in its document last October, amended the Bank of England and Financial Services Bill to extend the Senior Managers and Certification Regime (SM&CR) to cover ALL FSMA authorised persons, rather than just those in the banking sector.

However, not many people seem to have noticed!

The SM&CR was originally introduced, and applied to the banking sector only, following the financial crisis in 2007-08, but after criticism about the previous market regime (the Approved Persons Regime (APR)) from the Parliamentary Commission on Banking Standards (PCBS), it was adjudged appropriate to extend the SM&CR’s reach to cover ALL FSMA authorised persons.

Furthermore, even those that have noticed, seem a little unsure on what the implications are for their firms.

In short, they will have to introduce “detailed systems and controls to ensure compliance” to record and regularly monitor the professional conduct of many of their staff – those in “senior management functions”, those whose roles are deemed capable of causing “significant harm” as well as non-executive directors.

And there’s the challenge, because what does “detailed systems and controls” mean?  Judging by recent trends, it probably doesn’t mean a checklist on a piece of paper or a spreadsheet!

The timeframes are generous.  SM&CR will come into operation for the banking sector and PRA-regulated firms on 7th March 2016, with the 7th March 2017 being the date for it to apply to ‘existing’ staff.    Other firms will have until 2018 to address the requirements.  However, with MiFID II also looming for 2018, firms really do need to start addressing these regulatory challenges sooner rather than later.

So the search is on and firms need to get their skates on.  The future looks a little slippery.

Quinapalus

  • 31 Mar, 2016
  • Quinapalus
  • 0 Comments
  • Senior Managers and Certification Regime, SM&CR,

Share This Story

Categories

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *