The extension of the Senior Managers and Certification Regime (SM&CR) to investment firms from 9th December 2019 represented a major overhaul of the way in which individuals working within those firms are regulated.
Replacing the approved persons regime, the SM&CR is designed to encourage staff to take personal responsibility for their actions, which should improve conduct at all levels of the organisation.
The SM&CR introduced a new set of enforceable rules that set high standards of personal conduct which, if not observed, may lead to enforcement action against the individual. These apply across most of the people at a firm, with only ancillary staff being excluded, with the aim to improve the standards of conduct and culture. Firms must ensure that their employees not only know these conduct rules, but also understand how they apply to their own roles.
This is one of the significant challenges that firms face - the need for employees to receive training which is specific to their role, rather than relying solely on generic training content.
Who do you need to train?
If your firm is subject to the SM&CR, then almost everyone within the firm is likely to need training. The depth and breadth of training coverage will depend on the individual’s role within your firm:
Awareness training for all staff
Virtually everyone in your firm needs to be aware of the SM&CR and particularly the 5 individual conduct rules – enforceable rules that will apply to many more staff members than the previous Approved Persons Regime.
In-depth training for Senior Managers
The increased accountability placed on those that run your firm – the senior managers – and the fact that these individuals need to be approved by the FCA, mean that in-depth training might be required. This will need to cover both tiers of conduct rules, as well as how these rules might impact the particular senior management function being performed.
Training for Certification staff
Certification is the way the regulator requires firms to deal with specific functions that are not senior management functions, but can have a significant impact on customers, the firm and/or market integrity. Examples include client facing functions such as client advisers and discretionary managers (including everyone previously approved to perform the CF30 Controlled Function), and prop traders at the firm. Care will need to be taken to make sure these people are sufficiently trained to fulfil their role as well as appreciate the conduct requirements of the SM&CR – particularly because it is your firm (and not the FCA) that must certify these individuals as ‘fit and proper’.
How can this be achieved?
Every firm is different in size and complexity, so we have a range of options to help you with your SM&CR training with best results achieved when applying a blended approach from the following:
Why CCL Academy?
We have first-hand experience of the new regime having worked with banks during the original rollout of the SM&CR, and many more firms leading up to the extension of the regime in 2019. Our training faculty has trained many senior management teams and other employees on the new rules and their practical impact.
What should you do to find out more?
- Contact our experienced SM&CR training team directly
- Visit the CCL Academy website directly (this will take you from this site to www.cclacademy.co.uk)