Understanding the Phase 1 Reforms to the SM&CR

Module 1: Introduction to SM&CR and the Need for Reform

• What is the Senior Managers & Certification Regime (SM&CR)?

• Brief overview of its purpose: individual accountability, standards of behaviour and competence

• Key components: Senior Management Functions (SMFs), Certification Regime, Conduct Rules

Why are Reforms Being Introduced?

• Government's objective: drive growth in financial services

• Regulators' aim: make the regime more effective, efficient, and less onerous

• Maintaining consumer and market protection, and the safety/soundness of firms

• Context: Edinburgh Reforms and previous discussion papers

Module 2: Deep Dive into Phase 1 Proposed Changes

• Streamlining Senior Manager Applications

• Increased time and flexibility for submitting applications due to unexpected/temporary changes

• Increased validity period for criminal record checks before application submission

• Clarification on the definition of certain SMF roles

Reducing Certification Regime Burden

• Proposals to strip out duplication for individuals certified for separate functions (aiming for 15% reduction in roles)

• Guidance on streamlining annual 'fit and proper' checks

• Extended time for firms to update the Directory of certified staff

Adjusting Reporting Requirements

• More time allowed for firms to report updates to senior manager responsibilities

Module 3: Implications and Continued Accountability

• Operational Impact for Firms

• Changes to internal processes for onboarding SMFs and certified individuals

• Adjustments to annual certification review processes

• Updates to internal record-keeping and reporting

Maintaining High Standards and Accountability

• Reinforcement of the principle: "Integrity and accountability at the top matter"

• How the reforms support outcomes-based regulation without diluting accountability

• Case studies or examples (if available) illustrating accountability

Q&A and Discussion

• Open forum for questions and discussion on specific scenarios or concerns

Module 4: Next Steps

• The consultation process:

• Ongoing consultations and how to provide feedback (if applicable for participants)

Preparing your firm:

• Reviewing current SM&CR policies and procedures

• Identifying areas for adaptation based on agreed and proposed changes

• Monitoring future announcements from the FCA and PRA

Summary Discussion, Takeaways and Close

Training Objectives

Upon completion of this training, participants will be able to:

• Understand the key drivers and goals behind the FCA and PRA's reforms to the SM&CR

• Identify the specific agreed and proposed changes impacting senior manager applications, certification roles, and reporting requirements

• Recognise implications of these changes for their firm's SM&CR processes

• Appreciate the ongoing commitment to individual accountability within the streamlined regime

• Prepare their firm for adapting to the new guidelines once finalised

Training Course Summary

The proposed Phase 1 reforms to the Senior Managers & Certification Regime (SM&CR) aim to make the regime more effective, efficient, and less burdensome. The goal is to drive growth in the financial services sector. The proposed changes focus on three key areas: streamlining senior manager applications, reducing the Certification Regime's burden, and adjusting reporting requirements. The reforms are also intended to maintain consumer and market protection alongside individual accountability. Firms should understand and be prepared for the changes once implemented. This is to ensure optimal efficiency in their compliance activity and to support business operations.