Senior Managers held liable under new SMCR requirements


It’s only six months until the Financial Conduct Authority (FCA)’s new Senior Managers and Certification Regime (SMCR) requirements take effect. It’s important to remember as of December 9, 2019, a senior manager may be held personally liable for breaches in SMCR requirements. The FCA has made it clear it does not matter if the senior manager was involved in the breach. They will still be held accountable if the breach occurred as a result in their failure to execute on their SMCR responsibilities.  

The SMCR does not alter existing individual accountability rules for senior managers, but rather expands their scope. The SMCR also reinforces the FCA’s focus on firm’s culture and commitment to holding senior managers accountable for enforcing regulatory compliance within their organizations. 

A new set of Conduct Rules will apply to almost everyone in a firm under the SMCR requirements. This includes many staff members who’ve never been subject to FCA regulation before. They could also now be held accountable for SMCR violations by the FCA.  

The FCA has indicated it expects firms to take a proportional approach to SMCR compliance based on their size and complexity. But all firms must address the three main elements: Senior Managers Regime, Certification Regime and Conduct Rules. In addition, the FCA has set expectations on record-keeping, criminal background checks and the role of Corporate Legal within SMCR.  

For more details on SMCR requirements and how to comply, consider reading a recent article by JD Supra on the subject.