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Key Issues from the FCA Extending the SMCR Meeting 29th January 2018

  • United Kingdom
  • Financial services and markets regulation

12-02-2018

Summary

Simon Collins MD, Eversheds Sutherland Consulting recently attended an update led by David Blunt, FCA accountable executive. We wanted to update you on the items discussed at the meeting to ensure you are kept in the loop on the most relevant developments.

The FCA confirmed that there were no new issues and no comments as yet on the feedback to CP17/25, but Mr Blunt provided confirmation of key issues and was keen

to ensure there was a consistent and clear message coming from the regulator to be communicated to the industry.

The update was followed by a Q&A with a panel from FCA including representation from authorisation, supervision and enforcement.

Key points

  • the announcement on implementation dates are still awaited from Treasury. (It is expected that confirmation of the implementation date for insurers will be issued soon);
  • confirmation that the final rules will be issued in the “summer”;
  • approved persons will be automatically grandfathered across without the need to complete any forms. The exception is for those Non-Executive Directors who will be holding SMF9 (Chair) who will need to submit a Form K and a Statement of Responsibility (“SoR”) as of course will be the Enhanced Firms together with their Responsibilities Map;
  • FCA is expecting fewer SMFs than there are currently approved persons as they anticipate the majority of CF28 and CF29 becoming certified individuals; and
  • similar 12 month transition periods that existed for the banks and building societies will be brought in for certified and conduct rule staff.

Q&A

There were a variety of questions from the floor;

  • Appointed representatives - There was no confirmation on when the Appointed Representative regime will form part of SMCR;
  • Duty of responsibility and the interaction with statement of responsibilities (CP17/42) - The FCA confirmed that SoRs are a very important part of the evidence in a duty of responsibility issue but the FCA would also look at other evidence. There was a general reiteration by the FCA around the importance of the SoR;
  • Conduct rule breaches and the issue of integrity - This was particularly where the issue relates to activity directly outside of work, the example of the President’s Club was used! (The FCA’s comments regarding conduct rule breaches were quite guarded and they said firms would need to look at the issue on a case by case basis, what the firm’s policy was, what role the individual was undertaking etc).
  • Legal Counsel - A question arose regarding legal counsel and the SMCR and the FCA confirmed that this was still a consultation issue but they did state that firms that had taken a particular stance would not be criticised, if it subsequently transpires that the requirements differ from the approach the firm had adopted.

Finally…

The FCA confirmed there will be no splitting of the implementation date between Enhanced, Core and Limited Scope firms.

The FCA advised that it was tweaking its supervisory approach to reflect the SMCR requirements.

For more information contact

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