More information on SM&CR categorisation for solo-regulated firms

We are extending the Senior Managers and Certification Regime (SM&CR) in a way that is proportionate to the size of the firm.

There are 3 categories under the SM&CR:

  • Limited Scope
  • Core
  • Enhanced

An overview is available on how these categories apply.

Changing your SM&CR category

Some firms may choose to be categorised in the Enhanced or Core regime (‘opt up’), even if they do not meet any of the tests which automatically put a firm into the Enhanced regime. We have a simple process that allows a firm to notify us if it decides to do this. More information is available in section 12 of the SM&CR Guide for solo-regulated firms (PDF).

Following submission of a Form O, if a firm changes their decision and wants to return to their original SM&CR category, there are two options:

  • If they want to withdraw their notification before commencement of SM&CR on 9 December 2019, they should email requesting to do so. Once this is processed, the firm will return to their original SM&CR category.
  • If they want to withdraw their notification after commencement of SM&CR on 9 December 2019, they should submit a post-commencement Form O notification on Connect, revoking their previous opt-up. This will be available from 9 December 2019 and will take 12 months to take effect, during which time the firm must continue to meet the requirements of the SM&CR category they opted-up to.

If a firm decides to withdraw their notification, they can only return to their original SM&CR category – for example, a Limited Scope firm that has opted-up to Enhanced, cannot “opt-down” to Core. If they wanted to become Core, they would have to revoke the original Form O and submit a new one, opting-up to Core.

Once firms have opted into the Core or Enhanced regime, they will be required to comply with all of its relevant rules; failure to do so will be a breach of our rules – firms can’t choose to apply elements of the regime ad hoc.

Video: SM&CR overview

Together with business leaders from AXA PPP healthcare and Fidelity International, FCA Head of Conduct Specialists, David Blunt, outlines the effects of SM&CR and its benefits for your firm.

Reviewing your SM&CR categorisation

In order for you to work out whether your SM&CR categorisation is correct, you will need to know what information we have based our assessment on. Some SM&CR categories are based on your permissions or the type of firm you are. For example, sole traders and all limited permission consumer credit firms are categorised as Limited Scope.

However, some SM&CR categories are based on information you have submitted to us via our GABRIEL reporting system. If this information is incorrect, then you will need to resubmit this data to us as soon as possible in order for your SM&CR category to be reassessed.

There are six thresholds which will result in a firm being classified as Enhanced.  Four of these thresholds are based on GABRIEL returns. The table below shows what the thresholds are and what specific reports within GABRIEL this information is based on.

If you believe your categorisation is incorrect, please review the relevant return/s and if the information you have provided us is wrong please re-submit where necessary. Please ensure you are aware of what unit you should be reporting your data in – this will be stated at the top of the return within GABRIEL (for example, single units, thousands etc).  If you do need to resubmit any returns via GABRIEL, please be aware it can take up to 10 working days from when you submitted the data for our system to update your SM&CR categorisation.

If you believe that despite your GABRIEL data being correct you have still been categorised incorrectly, please contact us.

 

SM&CR Category Reason System Source
Enhanced Assets under management of £50 billion or more calculated as a 3 year rolling average GABRIEL FSA 038 field 1A
Enhanced Total intermediary regulated business revenue of £35 million or more per annum calculated as a 3 year rolling average  GABRIEL RMA B field 4E
Or;
If you are in retail intermediary who does not complete RMA-B please refer to our website
Enhanced Annual revenue generated by regulated consumer credit lending of £100 million or more calculated as a 3 year rolling average GABRIEL CCR002 column B rows 1-6, 8, and 13-14
Enhanced Mortgage lender or administrator (that is not a bank) with 10,000 or more regulated mortgages outstanding at the latest reporting date GABRIEL MLA-E Section E (2)
Row E4.5 column c3
Plus;
MLA-G
Row G1.1 (d) column c1

There are two other thresholds under the Enhanced SM&CR categorisation: 

  • Significant IFPRU
  • CASS large

Please review our Handbook Glossary to ensure you are aware of what each classification covers. If, after doing this, you still believe you have been categorised incorrectly, please contact us