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SM&CR: Statement of Responsibilities & Responsibilities Mapping

17th October 2018

SM&CR: Proposed Guidance

The FCA is currently consulting on guidance for FCA solo-regulated firms in preparation for extending the Senior Managers and Certification Regime (SM&CR) next year.

The SM&CR is being extended to all firms on the 9th December 2019, with the new regime making sure that there is clarity over who has ultimate and overall responsibility for each business area within firms.

Under the Senior Managers and Certification Regime, all those deemed to be Senior Managers must have a Statement of Responsibilities (SoR) and all enhanced firms must have a Responsibilities Map.

The proposed guidance (GC18/4) that is now being consulted upon aims to give practical help and information to firms preparing their Statements of Responsibility as well as their Responsibilities Maps.

Earlier in the year, the FCA published a guide for solo-regulated firms with regards to SM&CR and this new proposed guidance aims to build upon that issued previously, assisting firms to clearly set out responsibilities for Senior Managers through their Statements of Responsibilities as well as how to produce a clear Responsibilities Map that shows how their firm is managed and governed.

Within the guidance are examples of good and poor practice as well as examples of how to construct a responsibilities map.

Comments on the FCA’s proposed guidance should be submitted by the closing date of 10th December 2018.

What is a Statement of Responsibility (SoR)?

In summary, a Statement of Responsibility is a single document that every Senior Manager will need to have, clearly setting out their role(s) and responsibilities.

It should be clear and easy so as to be understood by the regulator, the Senior Manager themselves as well as others within the firm .There should be enough information on the SoR to clearly describe the Senior Manager’s actual responsibilities and accountabilities but without unnecessary detail being provided. As a single document, it needs to be able to be self-contained and therefore not refer to any other documents.

Firms are also reminded within the proposed guidance that preparing and maintaining an up to date Statement of Responsibilities is a legal requirement for individuals who are Senior Managers.

What is a Responsibilities Map?

A Responsibilities Map on the other hand provides an overview of how the firm is managed and governed. It should be a clear and easy document that is practical as well as easy to be understood by the regulator and those at the firm alike.

A firm’s Responsibilities Map should contain key information about governance bodies within the firm, senior management reporting lines and Senior Managers’ responsibilities. This key information must be presented at a legal entity level, yet if your firm is also part of a group, it should also clearly show how the firm relates to the group.

The FCA informs within their proposed guidance that good Responsibilities Maps usually have a mixture of graphics and text and are easy to navigate and comprehend.

Preparing for SM&CR

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

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