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Senior Managers and Certification Regime

HomePolicyKey Policy AreasRegulatorySenior Managers and Certification Regime
The FCA introduced the Senior Manager and Certification Regime (SMCR) in 2016 to increase individual accountability in banks, building societies, credit unions, PRA-designated investment firms and branches of foreign banks operating in the UK.

The regulators extended SMCR to almost all financial services firms, including UK-regulated private equity and venture capital firms, in 2018. In December 2019 it was extended to solo regulated firms and all Senior Managers and Certification Staff needed to have received training by this time.

BVCA SMCR e-learning for PE/VC firms

The BVCA, in partnership with ACA, has produced an e-learning module on SMCR requirements, tailored specifically for employees of BVCA member firms. Please click here for further detail and to enquire about making this module available for your firm.

Key features of the SMCR

Senior Managers Regime
Individuals performing senior management functions (SMFs) require FCA approval before starting their role. These Senior Managers must also have a statement of responsibilities setting out clearly what they are responsible for. Firms must allocate certain “prescribed responsibilities” to the appropriate Senior Manager. Each Senior Manager is under a “duty of responsibility” and could be held accountable for a regulatory breach within their area of responsibility if they did not take reasonable steps to prevent that breach.

Certification Regime
The Certification Regime applies to individuals who are not Senior Managers but who may cause significant harm to the firm or to customers due to the nature of their role. Such individuals do not need prior FCA approval but firms must certify that they are fit and proper to perform their role (their Certification Function) at least annually.

Conduct Rules
The Conduct Rules are high-level standards of behaviour for all employees. However, certain rules only apply to Senior Managers. The Conduct Rules set a basic standard of conduct which is similar to that under the Statements of Principle for Approved Persons, however, the Conduct Rules apply to a much wider employee base. The Conduct Rules apply to a firm’s regulated business but also to “unregulated financial services activities”, for example, an activity carried on in connection with a regulated activity.

The FCA set out the final rules on establishing a directory of individuals who would no longer be included on the Financial Services Register (“FS Register”) following the extension of the SMCR. The Directory is separate from the FS Register, which contains only Senior Managers. The Directory includes individuals performing roles that are no longer made public on the FS Register.
Further information

FOR FURTHER INFORMATION PLEASE CONTACT THE BVCA

 +44 (0)20 7492 0400

 policy@bvca.co.uk