FIN.

FCA finalises CMC SMCR rules

FCA has published its policy statement and final rules explaining how it will apply the SMCR to CMCs.  In the main, it has confirmed the rules it proposed, with a few adjustments following consultation. The key elements of the regime will be:

  • that CMCs with no other regulatory permissions will be Limited Scope firms for SMCR purposes. Existing limited scope firms that add claims management permissions to their profile will be able to remain limited scope;
  • CMCs that have no other regulated activities will need to appoint individuals to the SMF29 (Limited Scope Function) and, for “Class 1” CMCs, the SMF 16 (Compliance Oversight Function). These functions may be held by the same person if appropriate. As Limited Scope firms there would be no prescribed responsibilities;
  • key individuals within CMCs who perform Certification Functions will also require to be listed in the Directory; and
  • fit and proper and regulatory references requirements will apply to CMCs, as will the Conduct Rules, in the same way they apply to other firms.

FCA plans to authorise individuals for when the SMCR starts, although it is now starting to authorise firms – so there will be no approved persons in CMCs. It will also allow newly authorised firms that are CMCs a transitional period to complete the fitness and propriety assessments.

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Emma Radmore