When SMCR came into force, it was all about increasing personal accountability and bringing about real culture change. And by now it should be deeply embedded within your organisation. But SMCR compliance is continual and ongoing, so while the implementation date may be a distant memory, the work doesn’t stop there.
You might’ve sorted all the required authorisations and approvals for new joiners, with the candidate fully onboarded, but SMCR’s ongoing scope means situations will arise where Fitness and Propriety might need reassessing. And in cases relating to an SMF, this might mean having to reach out to regulator.
Here are the main triggers you’ll want to look out for.
Annual fitness and proprietary assessments shouldn’t be rubber stamp exercises. They should be thorough and consistent to ensure senior managers and certified individuals remain suitable for their role under SMCR guidance, with development plans in place if needed as part of the performance management process.
Firms should also be thinking about honesty, integrity and reputation – considering any non-financial misconduct as well as competence, capability and financial soundness – as part of the annual assessment.
Internal role changes
Even if they passed their original assessment with flying colours, any individual looking to change their certified role or apply for a new Senior Management Function (SMF) will need to start the process over with their revised remit in mind.
You’ll need to be thinking about how you can evidence these competencies:
- Have you ensured your CFs and SMFs are fit and proper to perform the new role?
- Do they have the relevant skills?
- Do they need additional training or qualifications?
- Does your Senior Manager have the right level of seniority to perform the new Function?
- Do they have the time?
- Have you updated your SMF’s Statement of Responsibility (SoR)?
Whether you’ve found a member of staff to be in breach of the Conduct Rules, or have received numerous upheld complaints about an individual inside or outside of work, these concerns will need reporting through the proper channels.
This includes the regulator being notified about suspensions imposed as a disciplinary action following a finding of misconduct.
Newly disclosed information
As standard, regulatory references should include all ‘relevant’ information from the past six years. However, the FCA currently allows firms to decide what is relevant on a case-by-case basis, so be aware of the small chance something new could come to light after the fact.
In the event you receive an updated regulatory reference from a past employer, you should examine how this new information could affect their fit and proper status – especially when the disclosure has clear implications on that individual’s fitness for their role.