SMCR currently applies to entities authorised under the Financial Services and Markets Act. To date, this has meant that payment institutions and e-money institutions – which are authorised under the Payment Services Regulations and Electronic Money Regulations respectively – have not had to apply SMCR.

Does SMCR apply to payment services?

Whilst SMCR does not (yet) apply to payments firms not additionally authorised under the Financial Services and Markets Act (FSMA), the principles can be usefully applied by payments to enhance governance.

What firms does SMCR apply to?

The SMCR has been in force for banks, building societies, credit unions and PRA-designated investment firms (Relevant Authorised Persons) since March 2016 and was extended to cover all Financial Conduct Authority (FCA) solo-regulated financial services firms on 9 December 2019.

Who do SMCR conduct rules apply to?

The Conduct Rules apply to a firm's regulated and unregulated activities (including any related ancillary activities) and are applicable to all Senior Managers; those carrying out Certified Functions; all Non-Executive Directors and any other employee not designated ancillary staff (i.e. HR admin, catering, cleaners, ...

Who does senior managers and certification regime apply?

They apply to all employees and are designed to help shape firms' culture, standards and policies and encourage positive behaviours. There are two tiers of Conduct Rules, rules for all staff, and specific rules for senior managers.

What does SMCR mean for me?

19 related questions found

Does Aper still apply?

The Approved Persons Regime (APER) continues to be used by Benchmark Administrators and Appointed Representatives (ARs).

What are the 3 main elements of the senior managers and certification regime?

There are three main elements to the regime: (1) the senior managers regime; (2) the certification regime; and (3) conduct rules that apply directly to a firm's workforce.

Does SMCR apply to non-executive directors?

The non-executive directors role

Guidance on the role and responsibilities of non-executive directors of SMCR firms is set out in the FCA Handbook at COCON 1 Annex 1. The role of a NED performing the general NED role is to: Provide effective oversight and challenge; and. Help develop proposals on strategy.

What is SMCR conduct rules?

You must act with integrity. You must act with due care, skill and diligence. You must be open and cooperative with the FCA, the PRA and other regulators. You must pay due regard to the interests of customers and treat them fairly. You must observe proper standards of market conduct.

What is the intention of the FCA's conduct rules?

The FCA will look to the senior conduct rules staff member to take reasonable steps to ensure that systems are in place to ensure that issues are being addressed at the appropriate level. When issues come to their attention, they should deal with them in an appropriate way.

Who does SM&C apply?

The SM&CR has applied to UK banks, building societies, credit unions, branches of foreign banks operating in the UK and the largest investment firms regulated by the PRA and the FCA since 7 March 2016.

What are SMCR firms?

The SMCR is part of the UK regulators' drive to improve culture, governance and accountability within financial services firms. It aims to deter misconduct by improving individual accountability and awareness of conduct issues across firms. Follow the links to access the key FCA and PRA publications on SMCR.

What is a certified role under SMCR?

According to the Senior Managers & Certification Regime (SM&CR), the purpose of the Certified Individual role is to ensure that all employees working in a financial services firm are fit and proper to fulfil their duty.

Does SMCR apply to appointed representatives?

The SM&CR won't apply to Appointed Representatives. They will continue to be subject to the Approved Persons Regime (APR).

Who does smf18 apply?

people who hold 'overall responsibility' for activities, functions or areas of the firm require regulator approval under SMF 18. Overall responsibility means that the person in question has ultimate responsibility for managing or supervising a function with direct responsibility for reporting to the governing body.

How many SMCR rules are there?

There are two sets of Conduct Rules. The first set applies to all staff (including Senior Managers). The second set only applies to Senior Managers.

What conduct rule applies to non-executive directors?

At present, the Conduct Rules that apply to Non-Executive Directors are: You must act with integrity. You must act with due care, skill and diligence. You must be open and cooperative with the FCA, the PRA and other regulators.

Does SMCR apply to NEDs?

The extended SMCR contains four broad categories of requirements (listed below) that are relevant to NEDs. Some of them apply to all NEDs, and some do not.

What is a non SMF director?

an individual who is a director of an SMCR firm but is not: (1) an SMF manager; or.

What types of firms are under senior managers and certification regime?

The Regime applies in a different way to different firm types. There are three categories of firm each with differing levels of requirements: Limited Scope, Core and Enhanced.

Who does FCA certification apply to?

The Certification Regime applies to those individuals carrying out specific functions (Certification Functions) for a firm that can have a significant impact on the firm or its customers but are not Senior Management Functions.

What is the approved persons regime?

Approved persons regime (APR)

Benchmark administrators that do not undertake other regulated activities and appointed representatives remain subject to the FCA's APR. ... Some controlled functions, under both the APR and the SM&CR, are designated by the FCA as significant influence functions (SIFs).

What is FCA Aper?

APER applies to FCA-approved persons who are approved to perform a controlled function in SUP 10A (FCA Approved Persons in Appointed Representatives).

Why was SMCR created?

It was introduced in response to a series of scandals. For example, those relating to LIBOR and FX rigging. Among its aims was to create much greater individual accountability of those working within financial institutions. In our experience, that aim has gone a significant way to being achieved.

Why should we be aware of SM&CR?

SM&CR aims to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence.