Practical steps FCA solo-regulated firms should take to prepare for the SM&CR extension
Practical steps FCA solo-regulated firms should take to prepare for the SM&CR extension

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • Practical steps FCA solo-regulated firms should take to prepare for the SM&CR extension
  • What is the SM&CR, and when will it be extended to solo-regulated firms?
  • SM&CR statutory framework, rules and guidance for solo-regulated firms
  • Overview of the key changes and transitioning requirements for solo-regulated firms
  • Extending SM&CR: Core firms
  • Senior Managers Regime (SMR)
  • Certification Regime
  • Fitness, propriety, and regulatory references for SMFs, CFs and NEDs
  • Conduct Rules
  • Extending SM&CR: Limited scope firms
  • more

The Senior Managers and Certification Regime (SM&CR) will be extended to all firms authorised under the Financial Services and Markets Act 2000 (FSMA 2000) and regulated by the FCA and not the PRA (‘solo-regulated firms’, also referred to as ‘FCA firms’) on 9 December 2019 (Commencement). After this date, the SM&CR will replace the Approved Persons Regime (APR) for nearly all solo-regulated firms. Failure to comply with the SM&CR risks enforcement action against firms and/or individuals, including the imposition of penalties where an individual is performing a controlled function without regulatory approval.

This Practice Note provides a detailed overview of the application of the SM&CR to solo-regulated firms based on their classification as Limited Scope, Core or Enhanced firms; in addition, it sets out the separate requirements for EEA and non-EEA solo-regulated branches. It goes on to provide a task list for firms and senior managers preparing for the extension.

Although the FCA’s rules for solo-regulated firms apply to claims management companies (CMCs), due to sector-specific considerations, readers are advised to also refer to Practice Note: The application of the SM&CR to claims management companies. Sector-specific considerations also apply to benchmark administrators and the FCA’s rules on the SM&CR extension are not yet finalised in this respect. Benchmark administrators will therefore remain subject to the Approved Persons Regime (APR) for an additional year