Simple Checklist For Implementing SMCR In Business | Worksmart

Julie Pardy

Julie Pardy

With more than 30 years service in the Financial Services industry Julie has spent many years at the coal face undertaking a wide variety of roles in banking from Compliance to Sales, Operations to Training.

In order to kick start the SMR (Senior Manager Regime) component of your SM&CR (Senior Managers and Certification Regime) implementation, considering these 5 key areas will help set your project off on the right path;

1. Understand which SMFs and Responsibilities are relevant to my firm

Firms will be categorised as either Dual-Regulated, Solo-regulated, Enhanced, Core or Limited. The PRA/FCA has set out which SMFs and Responsibilities are appropriate for each category of firm. Make sure you are clear on what type of firm you are. 

The FCA published a summary of their rules and guidance on the Senior Managers & Certification Regime (SM&CR), click here for solo-regulated firms and here for insurers

2. Allocate Responsibilities across your management team

Whilst most will be obvious, some Prescribed Responsibilities could be allocated to several senior executives. The Prescribed Responsibilities allocated will form part of a senior manager’s Statement of Responsibility so becomes a critical part of an individual’s regulatory accountability. Once allocated, it’s key that you get agreement to your proposed allocations and, importantly, get this agreement in writing!

The FCA published some useful guidance on the identification and allocation of FCA Prescribed Responsibilities 

3. Consider if any of the Prescribed Responsibility definitions need to be personalised

Whilst most firms will allocate the Prescribed Responsibilities as standard, it should be remembered that Responsibilities can be tailored if the regulator’s Responsibility definitions don’t reflect your firm’s business model. Don’t be afraid to adjust them via senior managers’ statements of responsibilities if that’s what makes sense for your firm.

There is much to be learned from the experience of the banking sector. Back in 2016 the FCA provided feedback statements on their in-depth supervisory review of the Statements of Responsibility (SoR’s) and Responsibility Maps. This feedback contains useful information and insights that are still relevant today. 

4. Expect NEDs to take a lot of time and attention

Because NEDs often work across different industries, they may not be fully aware of the incoming regulation. Overlay this with the fact they are part time and, sometimes, need more support to get to grips with new systems and you realise they need time. The message is clear, although there are only a handful of NEDs in each firm, expect them to need more time and support than other senior execs.

5. Expect it to take more time than you expect

Experience has shown that this take weeks and often months to ‘put to bed’. So don’t delay, start early!

Designing your SMR is one thing, gaining understanding and commitment from all your nominated executives is a different matter entirely. Don’t underestimate the time it will take to explain your proposed allocation of SMFs and Responsibilities and gain full agreement. Introducing SMR will almost certainly require changes to job descriptions and, possibly, changes to executives’ employment packages. This will take time and some negotiation! In summary, use this simple checklist to guide your SMR planning but don’t estimate the time it will take to move from plans to agreement.

Please read more on our website page: Individual Accountability

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5 Great Strategies for Successfully Implementing SM&CR in your Organisation 


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