Key Points:
- Significant changes being introduced to regulation of FCA solo-regulated firms
- 39% of relevant surveyed executives unaware they are coming into scope
- 69% of respondents in implementation or preparatory phase say SM&CR top or high priority
- 65% of firms predict that significant HR work is required to meet the new requirements
To download the SM&CR Regulation Briefing and the Guide to SM&CR, click here.
London — 4 June
Over a third of executives polled as their firms were impacted by the expansion of the Senior Managers & Certification Regime were unaware they were coming into scope, an Acuiti survey has found.
The findings were released today as part of the Acuiti SM&CR Regulation Briefing which also found that the vast majority of firms currently under-going SM&CR implementation rated the new rules as high or top priority.
The SM&CR expansion affects over 47,000 solo-regulated FCA firms and comes into place on Dec 9, 2019. The three key elements of the regulations are the Senior Managers Regime, the Certification Regime and a Code of Conduct.
The SM&CR, which was designed to extend and largely replace the rules laid out by the Approved Persons Regime (APER), aims to reinforce personal accountability.
Fundamentally, its goal is the improvement of standards through a focus on competence and conduct. It also enables the FCA and PRA to easily and directly hold senior managers to account for any failings under their watch.
Acuiti’s survey of firms in the derivatives market found that 62% of firms are either still either conducting preliminary analysis or have not yet started preparing for the extension of the SM&CR.
Despite this, 69% of firms rate SM&CR implementation as either a top (8%) or high (61%) operational priority for 2019. Furthermore, 65% of firms responding indicate that significant work will be necessary to adjust to new guidelines, and only 29% indicate that they have the qualified personnel in house to conduct mandated yearly training.
Will Mitting, managing director of Acuiti, has said: “The findings of our survey indicate that there is a long way to go for the market to get ready for the expansion of SM&CR in December.
“The new rules will have a significant impact on operations and processes across tens of thousands of firms.
“Today Acuiti publishes the SM&CR Regulatory Briefing and longer, more extensive Guide to SM&CR, which is designed to help the tens of thousands of firms coming into scope navigate the changes.”
The survey found that the lack of awareness of the SM&CR expansion was most likely to be found among executives based outside the UK but with responsibility for branches or executives within the UK.
“It is essential that any manager that oversees operations in the UK is aware of these new rules as they may be brought into scope and held responsible for any failings in their UK operations,” said Will Mitting.
Acuiti is powered by data submitted anonymously by its exclusive network of senior derivatives professionals across the sellside, proprietary traders and the buyside.
The SM&CR Regulation Briefing and Guide to SM&CR was created in association with Katten and KRM22.
To download the SM&CR Regulation Briefing and the Guide to SM&CR, click here.
