COVID19: FCA guidance under review – SMCR under the microscope


The Regulator has often been criticised for ‘closing the stable door after the horse has bolted’. Covid 19, has provided an opportunity (which the FCA has grabbed) to provide timely and generally clear guidance and their expectations of the industry and support to consumers alike.

This article’s purpose is to focus on those specifically relating to the Senior Manager and Certification Regime. However, before I move on, it’s important to note that Covid 19 will have a profound impact and focus on such matters as financial and operational resilience. The FCA recognise this and last week issued a survey to 13000 firms on the former matter. In due time the results will be published, it will be interesting to see if publication is limited to participants or the industry | consumers more generally!

FCA response to Covid19: SMCR Guidance

In addition to daily challenges, firms need to keep abreast of FCA updates and evaluate how they impact current governance arrangements, business activities and controls. Functions like compliance and legal have a key role to play and need to remain agile to help with any interpretation and monitor for mis-conduct risk arising.

Promoting maintaining accurate and timely records, capturing decisions made, policy deviation, who made them, when, time period for review, rationale underpinning decision is advised; to support and ‘protect’ senior managers obligations under their duty of responsibility.

Focus on a couple of SMCR specifics

The following highlights some of the matters identified by the FCA contained in the above 2 guidance communications.

  1. Senior Managers identify emerging risks arising from the impact of the virus in their business areas and how it affects existing business and risks, along with the controls and resources used to manage them.
  2. SOR and changes to responsibilities

3. Temporary ‘12 week’ rule (updated recently on the 27th May) can be extended to 36 weeks in a consecutive 12-month period via a ‘consent to modification’ notification but must be Covid-related absence and meet other 12-week rule conditions.


Consider the following appropriate steps:

FCA Guidance – Senior Managers and Certification Regime (SM&CR) and (Covid-19): our expectations of solo regulated firms

Matter to consider – Re-allocate prescribed responsibilities on a temporary basis

Reasonable steps: Decisions and Records

  1. Individuals performing required functions:
  1. Fitness and Propriety (SMF dual regulated and insurance firms only – certified persons, but useful practice applied to solo firms)

FCA Guidance – Senior Managers and Certification Regime (SM&CR) and (Covid-19): our expectations of dual regulated firms

Matter to Consider – Ongoing fitness and propriety of certified persons

Reasonable Steps:

Written for CLARC by Anthony Epstein


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