One rule change, mooted in the FCA’s ‘Optimising the Senior Managers and Certification Regime’ consultation paper, which would affect advisers was listed under the heading ‘Certification Functions’.
It read: “If a firm employs a customer facing financial adviser, every manager above them in the same chain of responsibility will have to be certified (until the Senior Manager approved under the SMR is reached).”
The FCA also proposed minor changes to its handbook and regulatory forms “to ensure they are consistent with our rules”.
The consultation also posed a series of questions for stakeholders to answer.
Q1: Do you agree with our proposal to exclude the Head of Legal from the requirement to be approved as a Senior Manager? If not, please explain why.
Q2: Do you agree with our proposed notification requirement for relevant intermediaries that do not submit RMA-B and our approach to the period before commencement? If not, please explain why.
Q3: Do you agree with our proposed amendments to the scope of the Client Dealing Function?
Q4: Do you agree with our proposal to introduce a new Certification Function to cover individuals in Systems & Controls functions at firms where these functions do not require approval? If not, please explain why.
Q5: Do you agree with our proposal to extend the application of SC4 (from Senior Managers and all Non-Executive Directors) to all directors of UK Limited Scope firms? If not, please explain why.
Q6: Do you have any comments on the proposed amendments to our regulatory forms?
Q7: Do you have any comments on the cost benefit analysis?
Q8: Do you agree that these proposals would not result in any direct discrimination against any of the protected groups? Please provide any additional feedback you believe is relevant.
The regulator says the suggested changes were necessary to reduce harm to consumers and strengthen market integrity.
The new document’s opening statement read: “We have introduced a new regime for firms and regulators to strengthen accountability in financial services.
“The Senior Managers & Certification Regime (SM&CR) was introduced for banking firms in 2016 and insurers in December 2018.
“It will apply to solo-regulated firms from December 2019.
“We made near-final rules on the SM&CR in July 2018 and final rules for insurers in September 2018.
“When consulting on these rules we identified a few areas where we need to make changes.
“These proposals are set out in this Consultation Paper (CP) and are intended to provide extra clarity in some areas and help firms adjust to the SM&CR.”
Interested parties must respond to the consultation by 23 April.