Senior Managers and Certification Regime – scary or not?

As the new year gets under way many financial services companies are turning their attention to the Senior Management and Certification Regime, which will come into force for the majority of regulated firms on 9th December 2019.

There has been a lot of noise around the SMCR, as the banks, and now the major insurance companies are already subject to its rules, but do you need to worry?

It can’t be denied that the SMCR does bring in more individual responsibility for Senior Managers, with the daunting threat of criminal actions and large fines or even imprisonment but, if you pause for a minute, any senior manager of a well run business should have nothing to concern them. This is not a witch hunt, more a regime designed to ensure that, if negligent managers continue to run financial services businesses and cause harm to consumers and the economy, they can be held to account for their actions, or lack of them. That shouldn’t be scary, it should be applauded.

However there is undoubtedly a significant amount of work that needs to be undertaken in order to prepare for the SMCR at most companies. Small, owner managed or simple businesses will find that this workload is probably not as bad as it might at first seem as the FCA are proposing to “grandfather” most senior managers across to the new regime. But larger, more complex firms will need to carefully review their management structure and ensure that the right people are in the right positions and that their responsibilities are clearly documented and understood.

There is also a myth that “the Certification Regime doesn’t actually apply until December 2020”. While some reporting requirements do not start until 2020, firms who leave their preparations for Certification until that date will find that they do not have the information and documentation needed to demonstrate compliance. You need to be considering now who will fall into the Certification Regime and how your firm will demonstrate that it is issuing the required Certificates following a due process.

In all this it is vital to engage at an early date with your HR team or provider. They will be key in embedding SMCR procedures into business as usual and ensuring that staff receive appropriate training and resources.

So, yes, there is much to consider in preparing to meet the requirements of the Senior Managers and Certification Regime but for well run businesses this is nothing to be scared of.

If you would like further information or support for your business in preparing for SMCR please Contact Us.


"Caroline is someone I’ve worked with for over 15 years across four different FCA regulated businesses. Her opinion is something we have always trusted and respected. She has navigated us through an ever-changing regulatory environment and helped us deal with a large variety of different issues."

Andrew Gibson, Key Currency.

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Venta Compliance provides practical regulatory compliance solutions to companies regulated in the financial services sector. This includes support with authorisations, variations of permission and other notifications as well as post authorisation compliance monitoring and advice on meeting current and future regulatory requirements.

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