Senior Manager & Certification Regime

Senior Managers & Certification Regime (SM&CR)

The Senior Manager & Certification Regime was introduced by the PRA and the FCA as a result of a change to the Financial Services & Market Act 2013.  This allowed SM&CR to be introduced to both Banking & Insurance from 2016.  Following consideration by The Treasury (in the run up to implementing SM&CR into Banking and Insurance) a decision was taken to roll out SM&CR to what is now termed “Solo Regulated Firms” from December 2019.

The concept and introduction of SM&CR came as a result of a review into what went wrong in Banking as a result of the financial crisis in 2007-08.  Following a report entitled “Changing Banking For Good” led by the MP Andrew Tyrie, it was decided that a new and improved regime was required to replace the old Approved Persons Regime and provide both regulators with greater powers to hold individuals and firms to account.  Thus, the concept of SM&CR was borne.

The Regime itself if made up of the following three elements:

  • Senior Managers Regime
  • Cerfication Regime
  • Tier 1 & Tier 2 Conduct Rules 

Depending on firm type and whom they are regulated by will dictate what elements of the regime in its entirety apply to any particular firm.

Those firms that are dual regulated, namely Banks, Building Societies, Insurers and the 8 largest Designated Investment Firms have the highest and most detailed level of SM&CR requirements applied to them.  Solo Regulated Firms are categorised as either Limited, Core or Enhanced, with the Enhanced Firms having the greatest level of requirements applied to them, albeit still slightly less than the requirements that are applied to dual regulated firms.

Banks, Building Societies, Insurers and Designated Investment Firms have been subject to the regime from the 6th March 2016, and all Solo Regulated Firms are subject to the regime from the 9th Dec 2019.  For all firms, the requirements are phased and as such Solo Regulated Firms have until 9th Dec 2020 to implement their internal Certification Regimes and train their wider pool of staff on what the Conduct Rules mean to them in the context of the roles they fulfil. 

Our bespoke course has been developed to respond to the needs of your organisation and will aim to build a detailed understanding of the following areas:

  • The events that led to the review of previous regulatory approach
  • What triggered the development of the new Regime
  • What issues within the market it was believed it would resolve
  • The component parts of the new regime
  • The introduction of Individual Accountability
  • The new requirements on Senior Managers around the Duty of Responsibility
  • Certification – what it is, what it means to firm, and what must a firm do to comply
  • The wider introduction of Conduct Rules
  • The responsibilities on firms and individuals as a result of the changes
  • The introduction of The Directory and the impact on firms
  • The operational & reporting changes at a firm level that SM&CR brings
  • The up to date view on what is expect of firms and individuals from our regulators

For more information about our in-house courses on the SM&CR, please contact us at Academy_UK@lseg.com.