Senior Managers and Certification Regime

The Senior Managers and Certification Regime (SM&CR) replaced the Approved Persons Regime. This changed how people working in financial services are regulated.

Publication of Directory Persons data

Directory Persons data for firms regulated by both the FCA and PRA is now published on the Financial Services Register. Directory Persons data may show for some but not all firms regulated solely by us until 31 March 2021. 

Solo-regulated firms must submit their Directory Persons data via Connect by 31 March 2021. We will incrementally display data from solo-regulated firms as it is submitted from 14 December 2020. If submitting data for 10 or more Directory Persons, use the multiple add template or multiple amend template available on our website between 11 January and 18 March. For submissions using the single add or amend forms on Connect, this can continue until the deadline of 31 March 2021.

Find out more about the directory of certified and assessed persons.

 

Coronavirus (Covid-19)

We recognise that, if your firm is affected by coronavirus, you will need to keep your governance arrangements under review. Where we can, we intend to provide flexibility to you. We have made specific provisions for firms in these circumstances. Read our statements on the SM&CR and coronavirus for dual-regulated and solo-regulated firms.

Your firm doesn't have to have a single senior manager responsible for your coronavirus response. You should allocate these responsibilities in a way that best enables you to manage the risks you face. There are existing responsibilities specified in the Senior Managers Regime (SMR), for example SMF24 for operational resilience and SMF2 for financial resilience.

You should read our statement on workplace arrangements and work-related travel and our recommendation that the SMF1, or most relevant member of the senior management team, be responsible for ensuring an adequate process for adhering to government guidance.

 

The SM&CR aims to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence.

The SM&CR is a catalyst for change – an opportunity to establish healthy cultures and effective governance in firms by encouraging greater individual accountability and setting a new standard of personal conduct. 

As part of this, the SM&CR aims to:

  • encourage a culture of staff at all levels taking personal responsibility for their actions
  • make sure firms and staff clearly understand and can demonstrate where responsibility lies

PRA SM&CR evaluation report

The PRA has published a report on its evaluation of the Senior Managers and Certification Regime (SM&CR). The PRA evaluated the SM&CR as it applies to dual regulated firms – that is, firms regulated by both the FCA and the PRA and for which the PRA is the prudential regulator (deposit takers, designated investment firms and insurers).

We welcome the PRA’s report and we are pleased to note that it found that the implementation of the SM&CR was successful and that it was driving positive behaviours in the industry. This is in line with the findings of our own stocktake of the implementation of the regime in banks and building societies.

The PRA identified a number of areas for further consideration. We will work with them on these recommendations.

Video: banking leaders' experiences of adopting the SM&CR

Banks came under the SM&CR in March 2016. In this video, senior banking leaders, including Jayne-Anne Gadhia (Virgin Money), Liz Nolan (State Street), Vis Raghavan (J.P. Morgan) and Jon Symonds (HSBC), talk about their experiences of applying the SM&CR to their organisations.

Who it applies to

Show information for solo-regulated firms

  • Solo-regulated firms are those regulated by the FCA only. The SM&CR replaced the Approved Persons Regime from 9 December 2019.

Show information for insurers

  • Dual-regulated insurers are those regulated by both the FCA and Prudential Regulation Authority (PRA). The SM&CR replaced the revised version of our Approved Persons Regime and the PRA's Senior Insurance Managers Regime from 10 December 2018.

Show information for banks

  • The SM&CR has applied to UK banks, building societies, credit unions, branches of foreign banks operating in the UK and the largest investment firms regulated by the PRA and the FCA since 7 March 2016.

We have also applied the SM&CR to the FCA and published information about how we’ve done this.

Why regulations have changed

In response to the 2008 banking crisis and significant conduct failings such as the manipulation of LIBOR, Parliament set up the Parliamentary Commission for Banking Standards (PCBS) to recommend how to improve banking-sector standards.

PCBS recommended a new accountability framework focused on senior management. It also recommended that firms take more responsibility for employees being fit and proper, and that there be better standards of conduct at all levels in banking firms.

Based on these recommendations, Parliament passed legislation in December 2013, leading to the FCA and Prudential Regulation Authority (PRA) applying the SM&CR to the banking sector from March 2016. Parliament made further changes to legislation in May 2016, requiring us to extend the regime to all FSMA-authorised firms.

Page updates

12/01/2021: Editorial amendment Coronavirus information moved from the main firms coronavirus page,
08/01/2021: Information added Publication of directory persons data update.
16/12/2020: Information added PRA SM&CR evaluation report
09/12/2020: Editorial amendment House style updates