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The Senior Managers and Certification Regime (SM&CR) replaces the Approved Persons Regime for all FCA-regulated firms from 9 December 2019, changing how people working in financial services are regulated.
The focus is on greater accountability and increased responsibility.
Each FCA-regulated business will need to:
This is backed up by obligations to report various matters to the FCA.
The FCA doesn’t intend firms to change how they organise themselves or hire people to fill specific functions - the intention is to clarify and reinforce what effective governance looks like. The key goals are:
SMCR already applies to banks and insurers but from 9 December 2019 this is being extended to cover solo-regulated firms.
Solo-regulated firms are those regulated by the FCA only. If your firm is currently regulated under our Approved Persons Regime, this will be replaced by SM&CR from 9 December 2019. This is anyone from a sole trader to large enterprise - approximately 47,000 firms!
If unsure you can use the FCA firm checker tool.
Under the SMCR, 'senior managers' are individuals who perform one of the senior management functions designated by the FCA. These replace the 'significant influence functions' under the old regime. Senior Managers will need to be approved by the FCA to carry out their senior management function. Other staff currently requiring FCA approval will now be covered by the Certification Regime.
This will be a public register of all persons working in financial services organisations regulated by the FCA. This will include details of all past employment and any relevant qualifications. The aim of this is to increase transparency in the industry and consumer confidence.