The regulator granted a four month extension on implementing the new regime which governs the responsibilities of senior managers at regulated firms.
In July, due to the Coronavirus pandemic, the regulator extended the deadline for firms to complete the first assessment of the “fitness and propriety” of their Certified Persons under the new SMCR from 9 December until 31 March.
The extension covered the date the Conduct Rules come into force, the deadline for submission of information about Directory Persons to the Register and references in FCA rules to the deadline for assessing Certified Persons as fit and proper.
In new guidance released today, the FCA says that “as firms have adapted to the impact of the pandemic over the past few months, our expectation is that firms’ application of the SM&CR rules returns to normal.”
It said firms should be aware that some of the previously available provisions will end on 7 January and that relevant modifications by consent will end after 30 April.
In a previous statement, the FCA said that it would not expect a firm that needed to make temporary arrangements in direct response to the pandemic to submit updated Statements of Responsibilities (SoRs), if certain conditions were met. This provision will end on 7 January.
The watchdog says as most firms have now adapted to the new ways of working, it expects firms to apply the notification requirements as normal and submit a Form J when significant changes are made to SoRs.
However, it does not expect firms to submit updated Statements of Responsibilities relating to changes made before 7 January. It expects the temporary arrangements carried out under previous advice to be clearly documented internally so that everyone understands who is responsible for what.
In terms of the temporary arrangements for Senior Management Functions the modification by consent is still available. However, a firm cannot consent to the modification after 30 April and all modifications consented to before then will come to an end on that date.
The end date means that the maximum period of extension available to firms reduces closer to 30 April. It says if, for example, a temporary replacement for a senior manager is first appointed on 1 January, the allowance for a temporary replacement runs out on 30 April.
In terms of furloughed staff there is little change from previous statements. Unless a furloughed Senior Manager is permanently leaving their post, the manager will retain their approval during their absence and will not need to be re-approved by the FCA when they return. The firm is still responsible for ensuring the Senior Manager is fit and proper.
Individuals performing required functions such as compliance oversight, the money laundering reporting officer (MLRO) and the Limited Scope Function – should only be furloughed as a last resort, says the FCA. If the replacement is temporary, firms can use the 12-week rule to arrange cover.