Reporting Requirements under the Senior Managers & Certification Regime SM&CR

With the commencement of the Senior Managers and Certification Regime (SM&CR) slowly creeping closer we will be helping you to gradually build your understanding of the requirements. We’ll achieve this through a series of articles, each adding a layer of information to the last. You can read our articles on the SM&CR to date here.

Next up is to understand the requirements in relation to reporting to the FCA. This is not to be confused with regulatory references which is a separate reporting requirement under SM&CR.

Under the Approved Persons regime, we needed to inform the FCA when we intended to employ a new senior manager, undertaking a Controlled Function, within our firm. This was completed in the form of an application (Form A) and we were also obliged to report to the FCA any information that we would reasonably understand the FCA would expect us to inform them of. This included any new information which may impact their fitness as a Senior Manager.

Under SM&CR the reporting requirements are, unsurprisingly, significantly widened. We still need to inform the FCA of new Senior Managers, this time by way of a new Form A, however the obligations to inform the FCA of potential fitness issues has widened. The main example of this is the need to inform the FCA, within 7 days, whenever we have identified that a Senior Manager has broken one of the Conduct Rules. Firms must recognise the types of behaviours and actions which may constitute a conduct rules breach and implement an efficient reporting process. Equally firms must ensure that any changes to a Senior Manager’s Statement of Responsibility is communicated to the FCA by way of re-submitting up to date statements. Enhanced firms must undertake a similar exercise with the Responsibilities Map.

Firms must also report instances where they have taken disciplinary action against employees, including non-senior managers, where that disciplinary action is a breach of the Conduct Rules. This reporting, unlike breaches by Senior Managers, is to take place annually rather than after each incident.

Of course, the general obligation to report issues which the FCA would reasonably be expected to be given notice continues, as it always has, but with the formalisation of Senior Sanagers obligations, and thus individual accountability for failure to report such issues, firms are reviewing just how effective they are at notifying the FCA.

Another new reporting requirement is to inform the FCA who your firm has authorised under the Certification Regime, the theory behind this is the fact that current approved functions, such as customer dealing, are falling out of the Approved Persons / Senior Managers Regime into the Certification Regime. The issue, without such reporting, would be that customers would be unable to find out if an advisor had the relevant authorisation. The FCA propose to publish those individuals who are “certificated” under the regime.

We understand there is a lot to think about with the new regime, and certainly a lot to plan for, including the relevant procedures to meet the above reporting requirements. As such we are releasing a number of templates to assist, you can find them here.

If you need any further information do not hesitate to Contact Us!

#SeniorManagersandCertificationRegime #FCA #ApprovedPersonsRegime #ControlledFunction #ConductRules #StatementofResponsibility #SoR #ResponsibilitiesMap #CertificationRegime