Five Top Tips to support SM&CR compliance

The BVRLA will be monitoring compliance with the Senior Managers and Certification Regime (SM&CR) as part of its audit programme from January 2020, now that the regime has come into effect.

Regulated firms are advised to consider the following Top Tips:

  1. Firms should stay up to date with their FCA Permissions.
    Where brokers have the incorrect Financial Conduct Authority (FCA) permissions, they may automatically consider themselves under the incorrect tier for the SM&CR. Where members are unsure on whether their FCA permissions are correct, they should contact the FCA or the BVRLA Compliance team to discuss this. This should be an ongoing exercise and FCA Permissions should be reviewed as part of Compliance Monitoring in case of any changes to business activity.
  2. Firms should ensure that all required Prescribed Responsibilities for their firm type are allocated amongst Senior Managers.
    Further information on the required Prescribed Responsibilities by firm type can be found in the BVRLA’s SM&CR Factsheet.
  3. Firms should ensure that they have procedures in place to notify the FCA of changes to Statements of Responsibilities.
    From the 9 December, any Approved Persons that were registered with the FCA for an SM&CR firm will have been converted to the new regime. This does not mean that there is no need for ongoing monitoring; firms should ensure that the conversions have been correctly implemented and that any additional Senior Managers to be added under the new regime are submitted to the FCA. Firms should also ensure that procedures are in place for where Statements of Responsibilities for these individuals have any significant change.
  4. Train Senior Managers and Certification staff on the Conduct Rules and put in place a breach notification procedure.
    Members should ensure that any staff that fall into the ‘Senior Managers’ or ‘Certification’ functions of the regime are adequately trained in the conduct rules. Firms will also be required to have in place a breach notification procedure so that any breach of the Conduct Rules can be reported and resolved in a timely manner.
  5. Prepare for ongoing reviews of Senior Managers and Certification staff.
    Procedures should be in place for the annual review of Statements of Responsibility and annual fit and proper reviews of Senior Managers, Non-executive Directors and Certification staff. These reviews should be documented and logged.

The association encourages any FCA-regulated member requiring support with their firm’s implementation of the regime to contact [email protected].

Members are reminded of the BVRLA’s SM&CR Factsheet and may find the recent BVRLA blog from Steve Bloor useful.

Guidance from the FCA can be found on their website.