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SM&CR Information for Solo-Regulated Firms Awaiting Final Rules

SM&CR for Solo-Regulated Firms: Finalising the FCA Rules

15th July 2019

The FCA announced last Wednesday (10th July 2019) that they are continuing to work closely with HM Treasury in relation to the extension of the Senior Managers and Certification Regime (SM&CR) for solo-regulated firms. This is since HM Treasury are tasked with preparing a Commencement Order after which the regulator will then be able to publish their final SM&CR rules affecting solo-regulated Firms this December.

Finalising the SM&CR Rules for Solo-Regulated Firms:

Whilst near-final rules were published by the FCA in July last year (PS18/14), the FCA then consulted upon further changes in CP19/4 that looked to optimise the new regime ahead of SM&CR Extension in this coming December.

However, it is only once HM Treasury have published their Commencement Order that the FCA will be able to publish the final rules to be implemented in less than six months’ time.

Included within the solo-regulated firms that are due come under the new regime from 9th December 2019 are Claims Management Companies (CMCs), for which the FCA also published near-final rules earlier this year in their Policy Statement, PS19/9, in March 2019.

Additionally in March, the FCA also published near-final rules to introduce the new Directory of financial services workers in their Policy Statement PS19/7.

Thus, in summary the SM&CR rules still to be finalised are:

• CP 19/4 Optimising SM&CR (Proposals for Dealing Function, Proposals to include Systems & Controls Function, Clarification re application of Legal Function)  
• PS18/14 Extending SM&CR (Near final rules for Solo-Regulated Firms)
• PS19/9 (Near-final rules for Claims Management Companies)
• PS19/7 (Near final rules re Directory of Financial Services Workers)

All of the above can only be cemented once HM Treasury have issued their Commencement Order, as soon as which has been issued, the FCA will then look to publish a final Policy Statement.

Exceptions: SM&CR for Benchmark Administrators

SM&CR will commence for all solo-regulated firms come 9th December 2019, this includes Claims Management Companies that are regulated by the FCA. However, still to be announced, will be the SM&CR commencement date for Benchmark Administrators. The FCA have informed they have requested and agreed with HM Treasury for a later SM&CR commencement date for benchmark administrators so that they may carry out a dedicated sector-specific consultation before making final rules for this sector and therefore this implementation date is still to be announced.

SM&CR Practical Support:

If you are preparing your firm for the extension of the SM&CR regime and need any advice or support, our experienced regulatory consultants would be happy to offer their assistance and practical support. Just drop our friendly team a line to discuss how we can help.

SM&CR Related Reading:

• SMCR: Six months to go!
• SMCR Responsibilities: A Comprehensive View & Holisitic Approach
• Starting SM&CR Preparations: What you need to know
• Preparing for SM&CR: Starting Tips
• Finalised Guidance: SM&CR Responsibilities - Statements & Mapping

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