UK Conduct Regulator Publishes Final Senior Managers & Certification Regime Rules for Extended Regime07/26/2019The U.K. Financial Conduct Authority has published its final rules extending the Senior Managers and Certification Regime to all FCA solo-regulated firms. The final rules take into account responses to the FCA's consultation paper issued in January 2019, which proposed changes to optimize the expanded regime. The regime aims to strengthen individual accountability of those working in financial services firms. It was introduced for banking firms in 2016 and for insurance firms in 2018. The expanded regime extends obligations to all FCA solo-regulated firms and will come into force on December 9, 2019.
The main changes to the expanded regime made under the final rules are:
- The exclusion of firms' Head of Legal from the requirement to be approved as a Senior Manager;
- The amendment of the criteria used to determine which firms fall within the Enhanced tier of the expanded SM&CR in order to bring Non-Retail Mediation Activity B firms within scope of the Enhanced regime;
- The amendment of the "Client Dealing" function, granting firms greater flexibility to determine whether a particular role should be certified for this function;
- The inclusion of the Systems and Controls function as an example of a Significant Management Function for Core and Limited tier firms; and
- The extension of the conduct rule requiring senior managers to disclose any information of which the FCA or PRA would reasonably expect notice to non-approved executive directors at Limited tier firms.
View the FCA's Feedback to its Consultation Paper and Final Rules.
View details of the legislation implementing the SM&CR.
You may also like to view our client note: The UK's Expanded Senior Managers and Certification Regime: Key Issues and Action Plan for Brokers, Advisers and Asset Managers.
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