FCA consultation (CP17/25) on Senior Managers and Certification Regime


Key Proposals

The FCA proposes to:

  • apply a standard set of requirements to all FCA solo-regulated firms known as the ‘core regime’ for the SM&CR;
  • have extra requirements for a small number (fewer than 1%) of solo-regulated firms whose size, complexity and potential impact on consumers warrant more attention – these additions are called the ‘enhanced regime’; and
  • apply a reduced set of requirements for a group of firms we are defining as ‘limited scope’.

Key elements of core regime

  • FCA has defined Senior Management Functions. Senior Managers – those that perform these functions – must be approved by the FCA before they can begin their role.
  • Every Senior Manager will need to have a Statement of Responsibilities that clearly says what they are responsible and accountable for.
  • There are also specific responsibilities that firms will need to give to their Senior Managers (known as Prescribed Responsibilities).
  • Firms need to certify individuals subject to the Certification Regime are ‘fit and proper’ to perform their role at least once per year.
  • A new set of Conduct Rules will apply to virtually all individuals within a firm.

Key elements of enhanced regime

As above plus:

  • Additional Senior Management Functions.
  • Additional Prescribed Responsibilities.
  • Overall Responsibility - Enhanced firms will need to make sure that there is a Senior Manager with overall responsibility for every area, business activity and management function of the firm.
  • Responsibilities Maps - Enhanced firms will need to have a single document that sets out the firm’s management and governance arrangements.
  • Handover Procedures - Enhanced firms will need to make sure that a person who is becoming a Senior Manager has all the information and material that they could reasonably expect in order to do their job.

Next steps

The deadline for consultation responses is 3 November 2017.

The exact date for the commencement of extension of the regime is not yet known – it will enter into force during 2018.