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3/23/15 - Senior Managers and Certification Update

The Financial Conduct Authority on 16 March 2015 published its feedback statement and consultation paper on the new regulatory framework for individuals. The paper provides near-final rules on the senior managers regime, with policy intentions on the certification regime and conduct rules. 

As firms ready themselves for the implementation of the new regimes due to come into effect on 7 March 2016, the following changes are worth considering as part of preparation for the roll-out of the rules: 

  • Three new prescribed responsibilities: The scope of responsibilities has expanded. The FCA added Financial Crime, Client Assets Sourcebook, and Remuneration Code compliance to the list of responsibilities to be allocated to senior managers, along with wording changes to some of the other listed responsibilities. 
  • Annual board attestations: Boards are no longer required to attest compliance with the responsibility-map rules annually. The FCA has decided to use Principle 11, for firms to notify the regulator of any material gaps or changes.
  • Scope of the certification regime: The FCA has indicated it may extend certification to cover all traders and CF30s, with a consultation on the matter in the spring or summer.
  • Key functions: The FCA has amended the list to include market making, providing information on a benchmark, and administering a specified benchmark, while removing first-line quality assurance of sales. Responsibility maps need not contain all key functions, as these have been changed from rules to guidance. 
  • Presumption of responsibility: The FCA is consulting on its proposed guidance on what the “reasonable steps” are for senior managers when proving adequate oversight of the business areas they are accountable for. 

How Promontory Can Help

Promontory Financial Group has a wealth of knowledge in the regulatory sphere and is assisting a number of clients in this area. We are aware of the many challenges the new accountability regimes present. With our senior staff consisting of former regulators and senior industry practitioners, we are well-equipped for helping firms navigate their way through these challenges. One such challenge is the increasing importance of managing supervisory relationships. Building and maintaining regulatory relationships will become an integral part of every senior manager’s role. Promontory is also the market leader in preparing current approved persons for their roles and regulatory interviews.

We can assist in any aspect of the transition to the new regimes and help firms form and embed their strategy for building and maintaining strong, working regulatory relationships. We welcome the opportunity to meet with you to discuss how Promontory can assist you with this important change. 

For more information, please contact:

Stuart King
Managing Director, London
+44 207 997 3402.