Discussion Paper on Improving the SM&CR
The FCA and PRA jointly released DP23/3 on the 30th of March, seeking input on changes to the Senior Managers and Certification Regime (SM&CR). The regime aims to promote the safety and soundness of regulated financial services firms, by holding individuals (particularly senior decision-makers) to account. The Discussion Paper seeks feedback on a number of items, which broadly include the effectiveness of the accountability mechanism and whether the individual Fit and Proper assessment is fit for purpose. HMT have also issued a call for evidence with respect to the legislative framework and have referred to an earlier Call for Evidence which included expanding the scope of SM&CR to appointed representatives. HMT will issue this response to this Call for Evidence in due course.
When SM&CR was introduced in 2016, it had the purpose of introducing personal accountability for senior individuals at firms as well as prescribing responsibility on ensuring staff were fit and proper to conduct regulated activities. The impact of SM&CR should not be understated, with similar personal accountability regimes being introduced since 2016. With the updated Financial Services and Markets Bill working through parliament, now seems to be an apt time for a review of the SM&CR, which should ensure the UK remains competitive in a post-Brexit world.
