Extension of Senior Managers and Certification Regime

    
This is part 2 of a 3 part series on SMCR. Click here to read part 1, 'What is Senior Managers and Certification Regime?'. and subscribe to be notified for part 3, 'Implications of Brexit on SMCR'. We will also be releasing a more in depth white paper on the topic later this week.

What is Senior Managers & Certification Regime?

Senior Managers and Certification Regime (SMCR) is a regulation which was implemented in March 2016 by the UK regulators, the FCA & the PRA (Prudential Regulation Authority). The regime’s aim was to extend regulatory accountability to the senior managers within the top banks of the UK in an effort curb corruption and enforce an increased culture of compliance in the UK financial services market. In particular, it aimed to establish a framework to;

  • “Focus accountability on a narrower number of individuals at the top of the bank
  • Encourage individuals to take greater responsibility for their actions
  • Make it easier for both banks and regulators to hold individuals to account.”

You can read more about SMCR's origins from part one of this series on SMCR here; 'What is Senior Managers & Certification Regime?'

Extension of SMCR

'These newly affected firms and individuals have until 2018 to adjust and become compliant with the new legislation'

The UK parliament passed the Bank of England and Financial Services Act on May 4th 2016, colloquially named, “The Act”. This ‘act’ put in motion the expansion of SMCR to extend beyond PRA regulated institutions (banks, building societies, credit unions, investment firms and insurance firms) to all FCA approved financial firm operating within the UK. This act will affect over 60,000 financial services firms and 200,000 individuals from a wide range of sectors including; financial advisers, hedge funds, asset managers, stockbrokers among others. These newly affected firms and individuals have until 2018 to adjust and become compliant with the new legislation. It is important to note that any financial firms operating within the UK are regulated by the FCA, this means that any international firms with UK offices will also need to adhere to the newly expanded SMCR laws.

 

We recently ran a webinar, 'Senior Managers and Certification Regime Fundamentals'. You can view recordings from it here.

This is a 3 part series we are running on SMCR, subscribe to get informed for part 3, ''Implications of Brexit on SMCR'.

Sources: DeloitteMayer Brown

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