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The Senior Manager and Certification Regime (SM&CR) will be mandatory for nearly all FCA regulated firms by the end of 2019. SM&CR is designed to improve governance, increase individual accountability, and to hold individuals to account for regulations or failure to comply with the required standards of conduct. SM&CR obligations are determined by the classification of the firm- Enhanced, Cored or Limited scope.

What does the Senior Manager and Certification Regime mean for you, your employees and your organisation?

  • In the event of a breech or failure, the regulatory is required to determine if the Senior Manager took reasonable steps to prevent it
  • Agreement to a statement of responsibilities for each Senior Manager
  • Pre-approval by the regulator of a Senior Manager
  • Annual certification to reassess the fitness of individuals operating in significant harm roles, or material risk takers
  • A new set of conduct rules for all employees, and a drive to strengthen the risk culture throughout the organisation
  • Increased focus on the effectiveness of governance framework within an organisation with specified responsibilities
  • Changes to how firms may remunerate and mechanisms for potential claw back in the event of a failure
  • Changes to employee vetting & reference requirements, and record keeping.

How can you demonstrate reasonable steps to compliance to SM&CR?

  1. Implement an Appropriate and Effective Governance Framework

In addition to a clear responsibilities map, and individual statements of responsibility, the governance infrastructure needs to allow the Senior Manager to demonstrate responsiveness to issues, oversight of their responsibilities and evidence for decision making.

1RS provides experienced guidance and support in implementing solutions to this challenging regulation, including the appropriate and effective responsibility model and governance framework. 

2. Embedded risk and control environment with effective policies and procedures

A Senior Manager needs to ensure the risk and control environment for their area of accountability and policies and procedures are fit for purpose, and both designed and operating effectively. This is to demonstrate the business is controlled appropriately and compliant to regulatory requirements and standards.

ERIC, our integrated GRC links risks, controls, rules, tests, issues and events and automates your Risk and Control Self-Assessments, and all Risk & Compliance reporting. 

3. Culture and Training

An appropriate culture focused on customer outcomes, and allowing for identifying and escalation of issues and challenge of decisions Implementation of an effective training programme on the conduct rules and how to apply them for all employees.

To learn more about how we can improve and drive the culture and training for compliance to SM&CR for your organisation, click on the link below.

1RS can design and deliver employee communications and training, tailored for your specific business operations and staff. 

Senior Manager and Certification Regime