UK’s FCA extends SM&CR to FCA solo-regulated firms

The UK’s Financial Conduct Authority (FCA) has extended the Senior Managers and Certification Regime (SM&CR) to FCA solo-regulated firms.

The extension will come through on 9 December 2019 and includes claims management companies.

SM&CR was originally introduced to the market in 2016 with the aim of boosting individual accountability and help establish a standard of personal conduct for people working in financial services.

In January 2019, the FCA consulted on changes to optimise the regulation and identified a few areas where changes needed to be made.

The changes it has made includes the confirmation that the head of legal function is excluded from the requirement to be approved as a senior manager. It has also clarified the requirements and scope of the regime.

Finally, the FCA has extended the regime to non-approved Executive Directors at Limited Scope firms.

Earlier in the month, the regulator stated it was working with the HM Treasury to finalise and publish the new rulings. In its previous announcement, it stated that CMCs will not come under the regulation until they have been authorised by the FCA.

In a recent interview with RegTech Analyst, Cognitive View founder Dilip Mohapatra stated that more attention needs to be given to conduct risk. There has been a lot of attention given to KYC and AML but conduct risk and the problems it causes, are failing to get as much interest.

Mohapatra said, “we are really trying to establish conduct risk as one of the independent and dedicated segments, it should be looked at equally or even more because it’s also a big and pressing problem.”

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