Following the 2008 financial crisis and subsequent review of the financial services industry, parliament sought to replace the UK Approved Persons Regime (APER) with a regime that was more focused on firms’ senior managers and individual responsibility. This resulted in the creation of a new Senior Managers and Certification Regime (SMCR).
The SMCR’s overarching aim is to reduce harm to consumers and to strengthen market integrity. This is achieved by raising the standards of conduct for everyone who works in financial services, and by making senior people in firms more responsible and accountable for their conduct, actions and competence. The regime shifts the responsibility of activities within a firm onto senior managers and brings into scope non-executive directors.
How Will the Regime Apply to Different Firms?
For solo-regulated firms, the FCA took a proportionate approach to implementation to reflect the different risks, impact and complexity of firms subject to the extension. Under the FCA’s regime, firms are categorised depending on their size and profile into Core, Enhanced or Limited Scope firms.
Core Regime Firms – This will be the majority of firms, to which the standard set of ‘core requirements’ will apply
Enhanced Regime Firms – These are the largest and most complex firms, to which extra requirements will apply
Limited Regime Firms – These firms will be subject to fewer requirements than Core Regime Firms
The SMCR sets following key expectations
Reserved for the most senior individuals (‘Senior Managers’) who perform key roles (‘Senior Management Functions’ or ‘SMF’) it is required to be approved by the FCA
Statements of Responsibility (SoR) – Every SMF requires a document their responsibilities and accountability
Prescribed Responsibilities – List of prescribed responsibilities which must each be allocated to an appropriate Senior Manager
Duty of Responsibility – Reasonable steps to prevent a regulatory breach occurring
Responsibility Maps – Enhanced firms must prepare and maintain a single document of firm’s management and governance process
Handover Procedures – Enhanced firms must ensure staff with SMF role have all information and materials needed to do their job effectively. Firms must have policies explaining how it complies.
Overall Responsibility – Enhanced firms need to ensure that every activity, business area and management function has a Senior Manager with overall responsibility for it
The Certification Regime (CR) – Employees who are not Senior Managers but whose job can cause significant harm to the firm or its customers must undergo Annual certification. Responsibility for the CR must be allocated to a Senior Manager
The Conduct Rules include Individual Conduct Rules for all employees (except ancillary staff) and Senior Manager Conduct Rules for Senior Managers.
GRACE Can help you Manage this process efficiently
GRACE web based / tablet enabled, SMCR system offers you with collaborative tool which encompasses the Compliance department, Senior Management and Staff to establish the process for Policies, Senior Management Roles and Responsibilities definition, periodic reporting and keep track of any breach of responsibilities.
Centralized issue management helps you manage assignment, recording notes and issue closure.
GRACE offers Online Attestation Templates setup to ensure all the roles and responsibilities are clearly set up and sent to the respective people for their online attestation.
Attestation dashboard can keep track of status of attestation and ensure pending items are followed up.
GRACE Training allows setting up of customized training for the staff that can enable them to understand their roles and responsibilities and work in accordance to the code of conduct expected.
When there is a Staff turnover, GRACE makes it easy to onboard the new person to their roles and responsibilities using the online structured process.
Firms must report disciplinary actions taken due to a breach of the conduct rules to the FCA. This must be completed within seven days for Senior Managers, and on an annual basis for all other employees. GRACE allows keeping track of breach of conduct cases.
GRACE becomes the proof of compliance for FCA regulatory examination
GRACE SMCR Management
Made Easy with an Integrated Approach
Policies and Procedures Management
GRACE helps set up and manage the Policies and Procedures of the organization. It allows the policy and procedure management group to setup new policies, manage the changes to policies, review them among the peer group, record peer group comments and create the final version of the document, and release it to staff when complete. It keeps track of all the versions in the system
Online Periodic Reporting
GRACE can help set up the periodic reporting calendar and assign the reporting function to the respective owner for them to report online.
Reporting templates can be set up that can be used to ask for specific information for that function. Email reminders can be sent to remind function owners to report on their responsibilities
Issues in doing the functions can also be reported and tracked. Reports Dashboard can help track and monitor the reporting
Set up and Manage Organizational Structure, Roles and Responsibilities
GRACE can help set up and record the Organization Structure, the their role and responsibility definitions and staff that are assigned on those roles.
It also helps track their attestation status of their documents of their accepting the roles and responsibilities as per the role definitions
Setup and manage Training
GRACE helps manage the Training calendar by setting up the dates on which training would be conducted, along with information on the Training organization and documents that can be shared with the staff. GRACE can help add and manage staff that need to be included into the training. User Groups can be created an groups of users can be assigned training courses.GRACE will send out e-mail alerts to users on the dates of training and send them reminders based on their training status.
La Meer can also help users set up Customized Training courseware on GRACE that can be periodically change to reflect the business and role changes and allows the staff to be trained online.
The Training dashboard provides graphical view of all training sessions and the progress and scores of individual users and status of completion
GRACE can help set up attestation templates that are needed to signed by senior management to fulfil their roles and responsibilities.It can set up one time / periodic attestations for all the staff , send them e-mails to alert them of their requirement to attest and allow them to attest online.
For new comers / change of personnel from one role to another, the system can send them the new attestation set and allow them to attest online. GRACE will send reminders to staff. It provides the books and records to show proof of attestation.
The Great Value You Get from Using GRACE SM&CR
Organized, Efficient Oversight across the Organization
Manage every aspect of SM&CR Comprehensively and Effectively
Helps you build your Senior Management & Certification program in an effective manner to address the regulations comprehensively
Management reports on-line
Web based access, anytime anywhere, means no need for reports to be generated in various departments for presentation to senior management. Effort, costs, and time can be saved.
Early awareness reduces non-compliance
Online attestation for defined roles and responsibilities enables staff to be aware of their roles and ensures they can adhere to them.
Regulatory examinations can be handled with confidence
GRACE becomes live proof of compliance in the organization and saves an enormous amount of money in data gathering and report creation process for regulatory audits and examinations.
Customizable content for Organizational Process
By Creating and customizing the course ware to the organization’s processes training can be delivered at all levels to ensure their roles and responsibilities are well understood
Customized Training for your particular business needs can be quickly deployed
Customization of your training to meet the business requirements can be done quickly to enable you to adapt to new regulations or business changes and deliver it to your team on a regular basis
Organization Ownership of Data
Organizations suffer when key risk and compliance staff leaves. The information is scattered if maintained solely by individuals and are lying on disks in various forms. GRACE becomes the single central repository of documents, data and processes enabling continuity even when key people leave the organization
Visibility and Transparency through Powerful Dashboard
The Dashboard view provides all status at a glance to ensure all staff activities related to SM&CR are well understood and adhered to
Culture of Compliance gets institutionalized
With a business as usual process through the enterprise, a culture of compliance becomes institutionalized across the organization.
By making policies and procedures, roles and responsibilities, attestation and training thru a transparent process, accountability to ensure compliance can be established
Enormous Cost Savings
Enormous costs savings from having all the activities online
Avoid Excel Based Monitoring
Manage and keep track of people and their training processes in Excel sheets can be avoided
Complete Source of information : https://www.klgates.com/SEC-Proposes-Cybersecurity-Risk-Management-Rules-for-Investment-Advisers-and-Funds-3-9-2022. All Language quoted and attributed to the article On 9 February 2022, the U.S....
All information Quoted from the article https://us.eversheds-sutherland.com/NewsCommentary/Press-Releases/249220/Annual-Eversheds-Sutherland-Analysis-of-FINRA-Disciplinary-Actions-Shows-Huge-Surge-in-Financial-Sanctions?utm_source=vuture&utm_medium=email&utm_campaign=vuture-emails March 8, 2022 Eversheds Sutherland has completed its annual study of the disciplinary actions reported...
https://www.occ.gov/publications-and-resources/publications/semiannual-risk-perspective/files/pub-semiannual-risk-perspective-fall-2021.pdf All information here is quoted from the article. Please refer to it from the complete article The OCC is...
Key Highlights from the OCC’s Risk Alert on Dec 12th 2021 https://www.occ.gov/publications-and-resources/publications/semiannual-risk-perspective/files/pub-semiannual-risk-perspective-fall-2021.pdf All information quoted here is from the OCC...
https://www.sec.gov/files/exams-registered-investment-company-risk-alert.pdf SEC Risk Alert of October 26, 2021 Observations from Examinations in the Registered Investment Company Initiatives* All notes below...
https://www.linkedin.com/posts/la-meer-associates_empower-your-organization-to-comply-activity-6727625980141281280-9sl4 Please join us for a webinar on “Empower Your Organization to Comply” on Nov 12th 2020 at 11 am...