Following recent consultation, the Financial Conduct Authority (FCA) has agreed that SM&CR should now be extended out to include all firms authorised to provide financial services under the Financial Services and Markets Act 2000.
Originally SM&CR only applied to banks, building societies, credit unions and dual-regulated (FCA and PRA regulated) investment firms.
It is always tricky and complex for companies when regulations are being introduced, particularly when this means that people procedures need to change as result. For those working within the banking sector, SM&CR will be a familiar term but to provide some context around this, in March 2016, the FCA introduced SM&CR (a new set of regulations) into the UK banking sector. Designed to increase focus on corporate accountability and raise standards of professional behaviour, SM&CR has been seen by many as the most significant piece of regulation in the industry for a generation.
Although at the time, insurance companies were not included in this particular regime, it was recognised that due to the significant risks that they imposed, a regime specifically for insurers should be introduced. On this basis, the Prudential Regulatory Authority (PRA) introduced the Senior Insurance Managers Regime (SIMR).
However, recent consultation has taken place and it has now been agreed that SM&CR will apply to all firms authorised to provide financial services under the Financial Services and Markets Act.
This will therefore mean that SM&CR will replace SIMR but will also be extended to all other financial firms. It is understood that the new regime will introduce more rigour around processes and accountability with its main aims being to:
When will it come into force?
Due to its complexity, SM&CR is being introduced over a phased period with insurers needing to make changes and comply by 10 December 2018 and all remaining financial institutions by 9 December 2019. However, companies should ensure that they understand when these changes are applicable to them to ensure that they comply by the correct dates
What will this mean for your company?
In readiness for this implementation, certain policies, procedures and governance/compliance measures will need to be adapted and in some instances, new ones will need to be introduced. Training will also be required to ensure that all employees are familiar with the changes.
What do you need to do?
Understand where your company fits into this regime and when changes need to take effect
Understand what needs to take place to comply with the changes
For more information on SM&CR, please get in touch.
About the author
Dawn Laycock is a highly experienced People & Change expert with over 15 years of operating at senior levels within both global organisations and management consultancy firms, leading complex people change activities.
More recently, Dawn set up DiMensionaL Consulting, a people & change consultancy and engages with companies from Small Medium Enterprises to large global corporates.
Company website: www.dml-consulting.com
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October 4th, 2018