FCA is consulting on how firms and individuals will manage the transition to the extended SMCR. Its key proposal is to grandfather persons from the existing approved persons regime, so that firms can focus on embedding the cultural changes required rather than filling in forms.
FCA also seeks views on whether to extend the duty of responsibility to solo-regulated firms.
Key elements of the three consultations include:
- automatic conversion of approved persons in core and limited scope firms to the appropriate SMR (except for NEDs in core firms who perform the role of Chair); but individuals at enhanced firms will have to submit a “conversion notification” (Form K), with a statement of responsibilities and responsibilities map. A similar strategy will apply for insurers, with notifications being needed only for individuals at Solvency II firms and large NDFs
- a suggestion that firms will have to know who their certified staff are from the date the rules take effect, and these individuals must comply with the Conduct Rules from that date, but firms will have 12 months to complete their fitness and propriety assessments and put paperwork in place. There will be no requirement for get regulatory references for individuals whose roles are not changing. Firms will have 12 months in which to begin to apply the Conduct Rules to Other Conduct Rules Staff
- a proposal to keep the approved persons regime for appointed representatives as FCA does not have power to convert ARs to the SMCR. So the Governing and CF30 functions will continue to apply
- guidance on the new SMF24 – Chief Operations function
- an explanation of how banks will need to apply the new prescribed responsibility for training staff
- feedback that FCA is aware of the concerns raised by its proposal to include in the Register only SMF holders
- whether any changes to FCA rules are necessary to cover the extension of the duty of responsibility – FCA believes the rules are fit for purpose as currently drafted.
The consultations include many useful checklists and sets of new proposed forms.
FCA asks for comments by 21 February 2018. It plans to finalise its rules by summer 2018, and is assuming the rules will apply to insurers in late 2018 and to solo-regulated firm by mid-late 2019. PRA is separately consulting on the impact on insurers of the changes.