FCA Consults On Transition To SM&CR

N News

January 29, 2018

On 13th December the Financial Conduct Authority (FCA) published Consultation Papers setting out its proposals for how firms and individuals will transition from the current Approved Persons (“APR”) into the Senior Managers and Certification Regime (“SM&CR”). As a result, NCM will be applying all the relevant provisions in its regulated businesses.

 

The key points to note are:

 

1.     For all firms, bar insurers, the FCA does not expect the transition to take place until “mid-to-late 2019”. Previously the FCA had indicated that implementation would be “from 2018”. We hope this will give a longer period for the language (which has largely been applied from the banking sector implementation) to be altered to fit more readily with investment firms.

 

2.    As was the case when the SM&CR entered into force for Banks there will be a system of “grandfathering” or conversion of current Approved Persons into equivalent Senior Management Functions. As a “Core” firm NCM welcome this as it will ease the implementation process with no requirement to submit anything to the FCA to make the conversion happen. One exception to this will be where the current Non Executive Chair is approved under CF2 (Non-Executive Director function). The firm will need to submit a conversion notice to convert the NED to the SM9 Chair function.

 

3.     The new regime does not apply to Appointed Representatives. This is because the underlying legislation does not currently provide the FCA with the power to extend the regime to ARs.

 

For further information please visit the FCA website here http://bit.ly/2FpuXXs