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Get ready for SMCR sooner rather than later

01 February, 2018Heather Tilston
pexels-photo-416405It is important that firms start getting ready ‘sooner rather than later’ for the introduction of the Senior Managers and Certification Regime (SMCR), due to affect smaller regulated firms in 2019.

The SMCR replaced the Approved Persons Regime for banks, building societies, credit unions and dual-regulated (FCA and PRA regulated) investment firms in March 2016. This regime is now being extended to all firms across the sector.

In partnership with Worksmart, we have published a guide to SMCR, in response to demand from its members for more help and information on the changes, and are also running events for advisers to help them get to grips with what they need to do.

Ahead of the FCA’s consultation being published, we asked its members what they knew about the changes and what plans they had in place. Although, all compliance professionals surveyed were aware of the impending regulation, only 30% of firm owners/principals and 50% of advisers said they were. Of those that were aware, over 70% of firm owners/principals, 66% of advisers and even 30% of compliance professionals were unsure what category their firm would fit under in the new rules.

Although 90% of compliance professionals and 66% of firm owners/principals felt there was sufficient expertise within their firms to implement the new regulations, over 50% of firm owners/principals and wealth managers/regulated advisors and 100% of compliance professionals cited a desire for guidance and support from professional bodies.

GRADUATION324Brian Wilkinson, Managing Director, Corporate and Professional Qualifications, The London Institute of Banking & Finance, commented:

“It’s understandable that firms currently aren’t clear about how the new regime will affect them, but now is the time to start engaging with what it could mean in practice. We’d urge firms to read the FCA’s consultation, and respond if they have comments, but also to start planning now for the changes.  We hope this guide to SMCR, and the events we’re running, will help firms get started.”

Julie Pardy




Julie Pardy, Director of Regulation and Market Engagement, Worksmart, commented:

“Starting too late was a major cause of under preparedness in some banks; don’t let that happen to you. By planning to be ready a few months ahead of the practical deadline, it builds some contingency into your preparations and ensures any unforeseen issues won’t leave you exposed.”

The guide provides background on what’s changing and sets out the key things to know from the FCA’s recent consultation on its approach. Firms have until 21 February to respond to the consultation.

The guide also provides top tips for what firms should start to think about to get ready for the regime, recommending that firms should start thinking sooner rather than later about how the changes might affect them well ahead of the changes.

Top tips

  • Get started: Set up a project team as soon as possible. Assign people, budget and terms of reference plus, importantly, assign a senior manager as project sponsor.
  • Draw up your roadmap: identify what category your firm will fall under and understand the basic rules and transition arrangements for that category.
  • Set an early deadline: Aim for a project completion deadline of December 2018 to build in some contingency. 

We are running a number of events to support firms in their preparations for SMCR. Download the SMCR guide