Senior Managers And
Certification Regime
The Financial Conduct Authority (FCA) introduced the Senior Managers & Certification Regime (SM&CR) for all FCA regulated firms in December of 2019. The Regime represented a significant change to these firms and requires resources and planning to implement effectively.
Forming part of the FCA’s Culture and Governance priority, SM&CR aims to promote the development of a ‘culture of accountability at all levels within FCA regulated firms.
There are three categories of FCA regulated firms
- Limited Scope,
- Core and
- Enhanced.
SM&CR applies each of these categories in varying ways and must adhere to the rules that apply in respect of each category.
Replacing the FCA’s Approved Persons Regime, FCA authorised firms are no longer able to apply ‘Control Functions’ but must instead appoint Senior Management Functions (SMFs). These functions are typically held by the most senior people within a firm. This forms part of the Senior Managers element of SM&CR.
Why do some firms hold Limited Permissions and others don’t?
The Certification Regime (CR), the second element of SM&CR, requires that firms determine whether they are required to appoint a Certification Function.
The appointment of a Senior Management Function and/or Certification Function may only occur where the appointment satisfies fitness and propriety requirements and in the case of SMFs, where the appointment has been approved by the FCA. Certification Functions are approved by firms internally as opposed to the FCA. Certification functions should therefore be assessed and if found to be appropriate, issued a certificate that is valid for a maximum of 12 months. The ongoing fitness and propriety of both SMFs and CRs must be assessed annually as a minimum.
Appointed Representatives and Principal Firms
SMFs must have Statements of Responsibility. Depending upon a firm’s category e.g., Core firm, Statements of Responsibility will also have mandatory Prescribed Responsibilities (PR), which will be split amongst relevant SMFs or held by just one. This enables the FCA to identify who is accountable for a responsibility. PRs would not apply to Limited Scope firms.
For all categories of firms, there are Conduct Rules that must be adhered to. These are a set of minimum standards of individual behaviour and applies to all Senior Managers, Certification Functions, Non-executive Directors who are not SMFs and all other employees apart from ancillary staff.
There are two tiers of conduct rules i.e., Individual Conduct Rules and Senior Management Conduct Rules. Firms should seek to understand how the Conduct Rules are understood in the context of roles and responsibilities and ensure relevant individuals are appropriately trained.
FCA Authorisation
If you are looking to become authorised by the FCA, MEMA can help.
Each applicant who works with MEMA is assigned a dedicated Regulatory Adviser who will support you throughout your application, answering queries you may have relating to the application and providing you with guidance and support.
The process starts with a fact find between yourself and one of our Regulatory Advisors where we’ll get to know you and your business and how you intend to provide your services.
We will provide you with advice and guidance on how to comply with the FCA’s requirements and identify any risks.
We will then produce for you a series of documents to support your application and help ensure that you become authorised. These documents include a Regulatory Business Plan and Compliance Monitoring Plan. We also produce a compliance manual for you containing documentation for you to implement into your business upon authorisation to help enable you to comply with the FCA’s requirements.
An online application will then be completed along with all relevant forms, which will then be submitted to the FCA. Should there be any FCA questions, your Regulatory Adviser will work with you to draft a full response.
In short, we’re here for our clients every step of the way. We provide our clients with the benefit of our knowledge and experience to not only help ensure that your application is successful, but that your business has the right foundations to ensure positive customer outcomes.
Ongoing FCA Compliance
As an FCA authorised person or firm, you might need help to ensure you comply with the FCA’s rules.
We provide our clients with support they need to maintain compliance and avoid breaching the rules. Our bespoke service is individually tailored to each of our client’s requirements and objectives to help them meet in the best way possible.
Whether you need documentation to help you remain compliant, want ongoing advice or support, impartial monitoring of your activities or anything else, MEMA may be able to help.
Why Choose MEMA?
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MEMA has been supporting firms through the FCA compliance process since 2019. In that time, we have helped hundreds of businesses to successfully gain and retain FCA authorisation.
We have a unique blend of experience from ex-regulators, big 4 consultants and fin/regtech specialisation. Our team is highly experienced and expertly skilled. We specialise in providing our clients with solutions to often complex regulatory requirements and compliance needs.
Our unique industry insight and comfort with compliance enables our team to support you to the fullest extent possible, helping to develop your business model and compliance.
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Your key contacts
ADEMOLA OMOSANYA
Ademola is an accomplished consultant with over a decade of experience across regulation, banking, and consumer credit. As MEMA Consultants co-founder, he leverages extensive regulatory expertise to guide clients through critical processes and full compliance. His experience across sectors enables tailored solutions to complex business challenges. Ademola partners with clients as a strategic advisor to help futureproof their business through an in-depth understanding of the regulatory landscape.
MISAH MARAGH
Misah is a director at MEMA Consultants with over a decade of experience in financial services. Holding a legal background and postgraduate qualification, she previously worked at the Financial Conduct Authority. Misah has led compliance transformation for global consumer services organisations across Europe, the Caribbean, and Latin America. Her expertise includes implementing compliance frameworks for financial regulations, FCPA, UK Bribery Act, data privacy, and Sarbanes-Oxley. Misah is skilled at advising clients on operational and strategic projects, leveraging her in-depth knowledge of regulatory environments to deliver solutions tailored to complex business needs.
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