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By Laura Autiero Alan Hughes It will come as a relief for many firms who are struggling to operate as normal due to Covid-19, with staff being furloughed and management teams focusing on how to navigate the crisis, that the FCA intends to extend some of the Senior Managers & Certification Regime (the SMCR ) implementation periods for FCA solo-regulated firms.
The FCA has confirmed that firms will not be required to carry out its first assessment of the fitness and propriety of its certified persons by 9 December 2020, as originally planned, but instead have until to carry out this process. The FCA has stressed however that firms should still try and complete these assessments early and that they should not use this extension to delay removing persons who are considered not to be fit and proper.
The FCA has further announced that it will be consulting on whether to also extend:the date that the conduct rules come into force, and therefore the deadline that all conduct rule employees must receive conduct rule training; andthe deadline for submitting information to the FCA to be included on the FCA's new Directory.
The current deadline for both is 9 December 2020, however the FCA proposes to also extend these two deadlines until the 31 March 2021. The FCA will likely approve the extension following its consultation - as the FCA made clear in its announcement, this further extension is needed in order to ensure the SMCR deadlines remain consistent and it will provide much needed extra time for those who need it.
Firms should therefore review their current SMCR implementation timetable and decide whether the original timetable can be complied with or whether, as a result of Covid-19, amendments to the timetable are needed.
There is no requirement to notify the FCA that it intends to use the extension period and there is no requirement to only use the extension if required as a direct result of Covid-19. Despite this, firms should still however try and meet the original deadlines where possible and certainly should not leave it until 31 March 2021 - the FCA is likely to take a dim view of those who miss the extended deadline. Persons falling within the certification regime will be, by their very nature, carrying our roles that could have a serious impact on the firm, its customers, and the wider financial services market. It is therefore sensible to carry out a first assessment of these individuals' fitness and propriety as soon as the firm is able to do so.
Before 31 March 2021 firms must:
We have experience in designing certification processes and drafting certification policies for different types of regulated firms. Our fee for carrying out this work will be between £1,500 to £2,500 plus VAT, depending on the size and complexity of your firm, however we can provide you with a more definitive fee estimate on request.
Before 9 December 2019, firms had to train all Senior Managers and those individuals falling within the Certification Regime on the Conduct Rules and how the Conduct Rules apply to them and their specific role.
By 9 December 2020 (though this will likely be extended to 31 March 2021), firm must have provided conduct rule training to all non-executive directors and all other employees who have any involvement in the firm's financial services activities (whether regulated or not). Note that the FCA has listed a number of individuals who fall outside of the conduct rules, including secretaries, receptionists and cleaners. A full list can be found on page 45 to 46 of the FCA guidance note here.
We have experience in designing and providing Conduct Rule training for a number of regulated firms. If you would like help with either designing and/or delivering this Conduct Rule training, please let us know (our contact details are below). Our fee for drafting the Conduct Rule training (which will need to be bespoke for your organisation and each employee’s role in accordance with the FCA’s rules) will be between £1,500 plus VAT and £2,500 plus VAT, depending on the size and complexity of your firm; however we can provide you with a more definitive fee estimate on request.
Should you have any queries on SMCR policy and procedures, duty of responsibility, individual accountability or anytihng else, please do not hesitate to get in touch with Associate, Laura Autiero , or Partner, Alan Hughes.
Senior Associate
Commercial, Tech & Data | Regulated Financial Services | General Counsel Services
