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The FCA’s Consultation Paper, CP 19/4 on Optimising the Senior Managers and Certification Regime, SM&CR closes

Background

  • The FCA issued their Consultation Paper, CP 19/4 on optimising the Senior Managers and Certification Regime on 23rd January 2019.
  • The Consultation is open until 23rd April 2019 for online or emailed responses.

Impact

  • The Consultation seeks to provide clarity on certain aspects of the SM&CR regime including the FCA’s position with regard to the inclusion of the firm’s legal function within the SM&CR regime.
  • The FCA proposes to exclude the legal function from the Overall Responsibility Requirement, the Head of Legal is excluded from SMR.
  • Amending the intermediary revenue criteria for the Enhanced Tier – the FCA proposes a notification requirement to bring intermediaries, with regulated revenue of more than £35m that do not complete RMA-B into the scope of the Enhanced regime.
  • The scope of the Client Dealing Function in the Certification Regime is altered to allow firms to exclude purely administrative roles that involve ‘taking part in’ investment activities.
  • Including the Systems & Controls Function in the Certification Regime – it is proposed that the Certification Regime applies to individuals performing roles that were Systems and Controls functions under the Approved Persons Regime, but which are no longer approved under the SM&CR.
  • Applying Senior Manager Conduct Rule 4 to non-approved executive directors at Limited Scope firms It is proposed to apply Senior Manager Conduct Rule 4 (SC4), in COCON 2.2 of the Handbook, to non-approved executive directors at Limited Scope firms to ensure that executive and non-executive directors at these firms are subject to equivalent requirements. SC4 requires relevant individuals to disclose appropriately any information of which the FCA would reasonably expect notice.
  • Additional minor changes to the Handbook are proposed to ensure all rules reflected appropriately.

Timeline

  • This Consultation closes on 23rd April 2019 with a Policy Statement to follow in Q3, 2019. 

Associated Regulatory Updates

  • The Senior Managers and Certification Regime, “SM&CR”

Further Information