Shake-up to SM&CR – what you need to know

Good news! Your firm is about the benefit from reduced costs, greater flexibility and easier compliance with the Senior Managers and Certification Regime (SM&CR).

At least that’s the plan, following reforms set out in April by the Financial Conduct Authority and Prudential Regulation Authority.

The changes come as the first phase of a multi-stage package of reform from government and regulators. The idea? To help firms while maintaining the core principle of senior leader accountability.

These are the highlights for your firm:

• More time to submit senior manager applications when there has been an unexpected or temporary change.  

• Removing the need to certify people to hold multiple overlapping functions, which will reduce the total number of certification roles required by around 15%.  

• Helping to streamline annual checks to certify individuals as ‘fit and proper’.  

• Making only larger, more complex firms meet enhanced standards, by raising many of the enhanced firm thresholds by 30%.  

• Helping to better understand the definition of certain senior management roles.  

• Allowing more time to report updates to senior manager responsibilities.  

• Increasing how long criminal record checks for senior manager applications are valid for, prior to application submission.  

• Giving more time to update the directory, which lists certified staff.   

Further changes to the SM&CR are underway. Proposals include removing the Certification Regime, which applies to less senior roles, from legislation. The government also proposes giving more flexibility to the regulators to further reduce the number of senior management functions (SMFs) which require pre-approval.  

The regulators plan to consult on wider changes, taking advantage of any increased legislative freedom later in the year, as part of the Leeds reforms to halve the SM&CR’s regulatory burden on firms.

Hopefully these changes will make running your firm a smoother process. And while we’re talking about smoother processes, when it comes to paraplanning, we are the experts at ironing out any wrinkles.  

Our model is simple: We build relationships that deliver what you want. Start working with us today.

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