Ready, Set … Go
The consumer credit sector is now under starters orders for SM&CR. In less than one month the first stage of the new Senior Managers & Certification Regime will start. Firms should now be set and ready to go. Here is just a brief reminder of what happens and how firms need to be ready on 9th December:
- The new Senior Managers Regime replaces the existing Approved Persons regime for firms that are directly authorised by FCA.
- Firms will be classified as Limited Scope, Core or Enhanced firms and this will affect how the rules apply to them.
- The new Conduct Rules come into effect for Senior Managers and Certification staff. It is a requirement that they are trained on these. There is a requirement to notify FCA within 7 days of any breaches of the Conduct Rules by Senior Managers.
- Existing persons performing Controlled Functions in Limited Scope and Core firms will be automatically transitioned into the new regime. Firms must check the FCA Register by 15th January 2020 to ensure people have been correctly transferred.
- All Senior Managers must have Statements of Responsibilities. These must be reviewed at least annually.
- Core and Enhanced firms must allocate the “Prescribed Responsibilities” laid down by FCA
- Recruitment and appointment procedures for Senior Managers, Certification staff and certain non-executive Directors will change including, in some cases, a requirement for Disclosure & Barring Service checks.
- New requirements come into effect regarding the provision of references to firms seeking to appoint Senior Managers.
- There will be a requirement for annual reviews of the fitness and propriety of Senior Managers, Certification staff and certain non-executive Directors.
- There are additional requirements for Enhanced Firms. Enhanced Firms in the Consumer Credit sector are lenders with annual revenue of over £100m.
The actions firms need to take before 9th December are:
- To identify which type of SMCR firm they are – Limited Scope, Core or Enhanced.
- To identify who will need a Statement of Responsibilities
- To draft and implement Statements of Responsibilities
- For Core and Enhanced firms, to allocate the Prescribed Responsibilities amongst Senior Managers.
- To train Senior Managers and Certification staff on the new Conduct Rules
- To update recruitment and appointment procedures, including the obtaining of Disclosure & Barring Service checks for Senior Managers
- To put in place procedures for providing references in the prescribed FCA format.
- To check the FCA register by 15th January 2020 to ensure existing persons performing Controlled Functions have been correctly transferred into their new SMF function
- To set up breach notification procedures to notify FCA of any Conduct Rules breaches.
- To put in place procedures to notify FCA of any “significant changes” to Statements of Responsibilities
- To put in place procedures for annual fit and proper reviews of Senior Managers, Certification staff and NEDs.
- To put in place procedures for the annual review of Statements of Responsibilities
- To update Compliance Monitoring Plans to check for SMCR compliance.
If firms need help and support with preparing for SMCR, please contact CCAS now and we will be happy to assist.
For more information click below to download the CCAS guide to SM&CR for Consumer Credit firms.