Compound Growth

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1st June 2017

‘Accountability II’: Senior Managers & Certification Regime to be extended in 2018

SM&CR is set to be extended to all FCA authorised firms next year. The extended regime, referred to by the regulator recently as ‘Accountability II’ will come into play for all regulated firms in 2018.

At the time of writing, a specific date of implementation is yet to be set, however, SM&CR became applicable to the Banking sector in March 2016, thus it seems likely a similar roll out for the extended regime may be expected towards the start of the 2018 calendar year.

A bulleted and high level overview of requirements for the Senior Managers and Certification regime including the Conduct Rules that applies to the Banking sector at present can be found below. All other regulated firms can expect for the same to apply to them once the regime is implemented for them and thus firms should look to include Accountability II planning on their Regulatory Change agenda and focus for 2017.

High Level planning for the Senior Managers Regime (SMR):

• Responsibilities map

o That describes structure, size and complexity of the firm, including management arrangements;

o That reflects a firm’s actual business and governance;

• Individual accountability to be confirmed by governance arrangements within the firm; and
• Each senior manager to provide an individual statement of responsibility.

High Level planning for the Certification regime:

• The Certification regime requires firms to assess the fitness and propriety of staff in certain roles on inception and annually;
• Conduct Rules:

o Firms to inform all staff that they are subject to conduct rules;

o All relevant employees to be given training on conduct rules that are specific to their role;

o Notify the FCA of breaches on conduct rules

Checklist for SM&CR:

In short summary of what Firms should be looking to include in their Accountability II planning, we have listed the following checklist items.

If you should require any support or assistance in planning for the extension of SM&CR then please do get in touch to discuss your requirements with our helpful and friendly compliance consultants.

• Identify all Senior Managers to be appointed
• Draft comprehensive responsibilities map
• Review job descriptions
• Ensure all functions and responsibilities can be allocated
• Establish a culture of governance and code of conduct
• Establish regular ‘fit and proper’ reviews
• Assess impact of conduct risk
• Training for future Significant Management Function (SMFs) holders and Certified Persons

SMR Regulatory Support: Who can help?

If you would like to discuss how the extended Senior Managers Regime and Certification Regime might affect your firm or if you would like assistance in planning or preparing for any of your firm’s current or future regulatory requirements, please get in touch with our helpful and friendly compliance support team.

Extension of Senior Managers & Certification Regime - ‘Accountability II’