I've highlighted below some points which may be helpful for firms to keep in mind as we move into 2020:
- Senior Management Functions (SMFs) should now appear in the Financial Services Register. Firms should check the Financial Services Register to make sure the correct SMFs are showing against them. If not, they should contact the FCA.
- Firms should be embedding fitness and propriety checks into their HR processes, this should include:
- being clear on who needs to be certified on an annual basis;
- building in the annual certification process;
- training staff on the Conduct Rules;
- looking at how criminal records checks and regulatory references fit into recruitment;
- making sure they are registered with DBS, Disclosure Scotland or Access NI; and
- setting up processes to obtain and provide regulatory references.
- Aside from the guidance issued on the Conduct Rules firms can access a podcast with practical tips.
- When delegating Senior Management responsibilities firms should look at the guidance in DEPP 6.2.9E to see what the FCA consider to be reasonable steps in terms of delegation.
- SMCR, of itself, does not introduce new governance requirements. It is still possible to have a CEO that is also Chair.
- A person does not need to be in the governing body to hold an SMF, for example, Compliance Oversight and MLRO functions are often held by persons outside the governing body.
- The executive director function (SMF3) can extend beyond those in the governing body. An SMF3 could be someone that on whose instructions or directions the directors of that body are accustomed to act.
