Senior Managers and Certificate Regime Milestone 6: Finalise Statements of Responsibilities

Before 9 December 2019, each Senior Manager needs to produce a Statement of Responsibilities (a SOR) using the FCA form that can be located here. The SOR will set out what the Senior Manager is responsible for and therefore ultimately accountable for.

We have provided below some hints and tips of things to think about when drafting SORs:

  1. The form is relatively short, however it will inevitably take you longer than anticipated to draft and finalise these. The SORs for each Senior Manager will need to talk and interact with each other and therefore cannot be drafted in isolation. You therefore need to set aside sufficient time for these documents to be drafted. The best way may be to set aside some time in everyone diary (i.e. all Senior Managers and anyone else assisting in the firm with SMCR compliance) and draft the SORs together.
  2. It is extremely important for the Senior Manager to be involved in the preparation of their SOR as this is what the Senior Manager will be judged by - it is what the FCA will hold the Senior Manager accountable against. The SOR should therefore not be an aspirational statement, but should accurately reflect what the Senior Manager will be responsible for.
  3. Finally, each Senior Manager may use up to 300 words to describe each responsibility listed in the SOR. Do not feel pressurised to use the entire word limit if this is not required. The FCA has stressed that these descriptions should be as short and concise as possible. Equally, do not be tempted to refer to other documents in an attempt to circumvent the word limit as the FCA has made it clear that SORs should be self-contained documents.

Note that if a Senior Manager holds multiple Senior Manager Functions, the Senior Manager will not be required to have a separate SOR for each Senior Manager Function. The Senior Manager can have one SOR, provided this clearly describes all of their responsibilities.

Each SOR will record the Prescribed Responsibilities allocated to that Senior Manager. Remember that each Prescribed Responsibility must ideally be held by one individual. Firms can divide or share Prescribed Responsibilities in only very limited circumstances. Where a responsibility is shared, each Senior Manager will be jointly accountable for those responsibilities. Where a responsibility is divided, this must be clearly explained in the SOR and firms must ensure that there are no gaps.

The SOR must be provided to the FCA when the Senior Manager applies for approval and whenever there is a significant change in the Senior Manager's responsibilities. SUP10C of the FCA Handbook provides examples of what amounts to a "significant change in the Senior Manager's responsibilities".

You will not be required to submit to the FCA a copy of the SOR for any Approved Person who will automatically be converted to a Senior Manager when the regime comes into force on 9 December 2019.

Our next Milestone in December will focus on planning for post-implementation and the transitional period. In the meantime, should you have any queries on the SMCR, please do not hesitate to get in touch.