CP20/10: Extending implementation deadlines for the Certification Regime and Conduct Rules

Open consultation: CP20/10
17/07/2020
Consultation closed
14/08/2020
14/08/2020

We are consulting on extending the deadlines by which FCA solo-regulated firms must have first assessed the fitness and propriety of their Certified Staff and for training staff in the Conduct Rules and reporting Directory Person data.

Read CP20/10 (PDF)

Why we are consulting

The Treasury will lay a Statutory Instrument (SI) before Parliament to delay the deadline to the Certification Regime until 31 March 2021. This delay will give firms significantly affected by the coronavirus pandemic (Covid-19) time to make the changes they need. 

This consultation proposes making changes to our rules to effect this change. It also proposes making a corresponding extension to the deadline for training staff in the Conduct Rules and reporting Directory Person data to 31 March 2021. Extending the deadlines will ensure they remain consistent and will provide extra time for firms that need it, and enable them to deliver effective training on the Conduct Rules. The proposals seek to reduce the burden to firms affected by the pandemic, while ensuring that regulatory standards and consumer protection are upheld.

We want to give regulated firms certainty, so we are consulting alongside the parliamentary process, to allow us to finalise our policy as soon as possible.

We will still publish details of certified employees of solo firms starting from 9 December 2020 on the Financial Services Register, as firms submit them to us. Where firms are able to provide this information before March 2021, we encourage them to do so.  

Who this applies to

  • All FCA solo-regulated firms authorised to provide financial services under Financial Services and Markets Act 2000 (FSMA) would be able to use the extension proposed. 
  • Appointed Representatives (ARs) would also be in scope of the proposed extension to the reporting deadline for Directory Persons.
  • These proposals do not apply to benchmark administrators.  

Background to the Certification Regime and Conduct Rules

The Senior Managers & Certification Regime (SM&CR) is designed to reduce harm to consumers and strengthen market integrity. FCA solo-regulated firms were given until 9 December 2020 to assess the fitness and propriety of certified staff, submit information to us about certified and assessed staff (Directory Persons) for inclusion on the FS Register and provide tailored training to all other employees, except ancillary staff, on the Conduct Rules. Firms should continue with their programmes of work in these areas and, if they are able to certify staff earlier than March 2021 they should do so. 

We expect accountable Senior Managers to ensure that all Certified Persons are fit and proper. Firms should not wait to remove staff who are not fit and proper from certified roles. Similarly, accountable Senior Managers must ensure that Conduct Rules training is effective, so that staff are aware of the Conduct Rules and understand how they apply to them in their jobs. These programmes will require planning, time and effort to deliver effectively. We will produce further communications about our expectations. Senior Managers and Certified Persons are already subject to the Conduct Rules and we will hold them accountable for any misconduct arising during and after the pandemic.

Benchmark administrators

The Certification Regime and reporting of Directory Persons do not apply to benchmark administrators, so we do not intend to consult to move the deadline for benchmark administrators. Benchmark administrators have until December 2021 to train non-Senior Manager staff in the Conduct Rules.

We do not consider that the current crisis will prevent effective implementation of Conduct Rules training in these firms and so we are not considering extending this deadline.

Respond to this consultation

This consultation has now closed. We will publish feedback on responses and issue a Policy Statement once we have reviewed your comments.