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The Senior Managers and Certification Regime

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16 December 2021

Helping to prepare FMIs, payment and e-money firms for proposed implementation

In October 2021, the FCA announced that it was considering extending the Senior Managers and Certification Regime (SMCR) to FMIs, payment and e-money firms. In what will be the third extension of the SMCR since 2016, a further 600 firms will be required to implement and comply with the requirements of the SMCR.

Although it may be premature to prepare for implementation right now as the specific details of how the SMCR will apply to these types of firms have not been confirmed, it is not too soon to think ahead to how you are set up and how you run your business, in order to put your firm in the best possible position when those details are announced. Since all iterations of SMCR have been about accountability, it makes sense to start thinking about whether roles and internal reporting lines are clearly defined and whether existing governance arrangements are clear and operating effectively. It is also worth looking at your recent pulse and annual workforce surveys to see what they are saying about the culture of your firm. This is an area in which the FCA is particularly interested as it sees healthy cultures as driving better conduct and better business decisions. Are there enhancements that you could be making in these areas sooner rather than later?

How we can help

Our Individual Accountability Working Group, which includes members of our market-leading Employment and Regulatory teams, has been at the forefront of the evolution of the SMCR. Since the SMCR was first announced in 2014, we and have advised over 150 banks, building societies, insurers, FCA-only regulated firms and benchmark administrators of different sizes in relation to the full range of issues that can arise – all the way from implementing the SMCR through to advising on operating it in practice. Through our work, we have driven the development of key market standards and practices which go beyond the rules and guidance already set out by the FCA. Our advice to clients is strategic, joined-up and practical, taking into account the risk appetites, objectives and scale of our clients’ operations.

We offer:

A unique offering of market-leading regulatory, employment and corporate governance advice

Our speciality has been to combine the expertise from our regulatory and employment practices so that implementation and subsequent operation and embedding of the SMCR is not only compliant with regulatory requirements but works in practice across with other parts of business, which deal with aspects of the SMCR including when issues arise such as investigations, disciplinaries and litigation.

Best practice advice based on lessons-learnt

We can deliver a market-leading service to you which will benefit from the lessons we have learned advising previous in-scope firms. We have developed a deep understanding not only of what it takes to be compliant with the FCA’s rules relating to the SMCR, but also what best practice looks like and what actually works in practice post-implementation

Going beyond the rules and guidance that have been published by the FCA

We have been heavily involved in liaising with the FCA and helping our clients to liaise with them (both pre and post-implementation) and, as a result, have a deep understanding of how the FCA expects firms to implement and operate the SMCR in practice.

A market leading implementation tool

We have created a specialist and market-leading online tool that provides firms with all the information and template documents that they need in order to implement the SMCR in a proportionate yet fully compliant and cost-effective way, which reflects market practice that has been informed by our extensive experience of advising over 150 clients in this area. We will be updating and re-launching this online tool when the FCA announce its proposals for extending the SMCR further.