Key developments in financial services: what to look out for in Q4 2019 and beyond

Key developments in financial services: what to look out for in Q4 2019 and beyond



Now that the threat of a no-deal Brexit has subsided (for now), financial services practitioners may breathe a sigh of relief, but this is no time to relax. There are plenty of other changes on the horizon that should keep financial institutions and their advisors busy until the end of 2019 and beyond. This article provides a quick overview of five of the most important developments:

  • the extension of the Senior Managers and Certification Regime to solo-regulated firms
  • the growing focus around the world on sustainable finance
  • preparations for the transition from LIBOR to other benchmarks
  • the new EU prudential regime for investment firms, and
  • possible expansions of the Financial Conduct Authority’s powers



Extension of the SM&CR to solo-regulated firms


On 9 December 2019, the Financial Conduct Authority (FCA) is extending the Senior Managers and Certification Regime (SM&CR) to solo-regulated firms. From this date, the SM&CR will apply to almost all firms authorised under the Financial Services and Markets Act 2000 and to branches of non-UK firms with permission to carry out regulated activities in the UK. The FCA created the SM&CR to expand the scope of individual liability, focusing on senior management responsibility and creating a firm-wide ‘culture of accountability’ in order to reduce consumer harm and strengthen market integrity. The SM&CR marks a fundamental shift in the FCA’s regulatory approach to individuals and compliance with the SM&CR is a top supervisory and enforcement priority for the FCA.

Most solo-regulated firms’ SM&CR preparations should be well underway; so-called ‘Enhanced’ firms should have submitted appropriate documentation to the FCA in order to transition their relevant employees from the Approved Persons Regime to the SM&CR. By day one of the extension, all firms are required to have identified those employees who meet the definition of one or more Certification Functions

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About the author:
Pietra has completed the Bar Professional Training Course at the University of Law and was called to the Bar in 2019. Prior to the BPTC, Pietra undertook a law degree at the University of Bristol.