SM&CR As A Journey – Are We There Yet?

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.

On Thursday the 4th February, I was invited by the TISA team to speak at their most recent SM&CR event.  As always, the TISA team had lined up a knowledgeable team to talk on the topic.  Peter Ewing from the FCA was present to give his (and the regulator’s) view on where firms were with SM&CR and where they should be taking them next.

There was a detailed review of the Conduct Rules by Celyn Armstrong, Partner at Dentons and then to finish off, there was a Panel Debate where Celyn was joined by Kate Mozzicarelli from Morgan Stanley and Gerard Butler from BNP Paribas.

As you would expect, with the topic under discussion once again being SM&CR, there was a lot to talk about!

FCA SMCR Worksmart Accord

Peter Ewing was very clear; both his and the FCA’s view is that SM&CR is a journey for both the regulator and for firms. It was interesting to hear this view from Peter as it went wider and was more to the point than anything I had heard from the regulator before.

He talked about the regulatory expectations around firms in that they will be expected to have a greater focus on staff propriety, skill and capability.  Nothing new there, you might say, but then he went on to say that he would expect that this much greater focus should not be reserved for Senior Managers and Certified Staff but should focus on every individual within regulated firms.

Of course, that makes sense given that the wider staff within an organisation are also subject to the Tier 1 Conduct Rules in the same way as Certified Staff and Senior Managers. However, for me, what was new and different was the specific reference to this ‘conduct rules’ community. Yes, they always been part of the SMCR regulation, but they have tended to be a ‘footnote’ in briefings by the regulator.

Now, if this community is of more interest to the regulator what does that mean for firms and those responsible for managing SMCR in those firms? One thing the regulator has made very clear in the past is that every category of individual, including those subject to only conduct rules, should have “Role Relevant Conduct Rules Training” provided to them on a regular basis.  Therefore, this means that the FCA is interested in all staff within regulated businesses and not just individuals that are either Senior Managers or Certified Staff.

A second issue discussed was that of Senior Manager Accountabilities and the importance of keeping them up to date and as new responsibilities arise and existing responsibilities are re-apportioned.

From our point of view as a Reg Tech solution provider, both of these points are interesting and worthy of comment.

On the subject of conduct rules, it has been obvious to us for some time that the wider topic of “Employee Competence” is of increasing importance.  It is this that drove us to develop a wider “Employee Competence” capability within our SM&CR solution, Accord. We did this for the simple reason that the conduct rules community is the largest population in SMCR and that those running the SMCR regimes in firms needed to have a robust framework and mechanism for managing the competence of these individuals as well.

Secondly, when considering the issue of making sure responsibilities remain aligned to the inevitable changes at senior manager level, it brings to mind the phrase SM&CR Lives and Breathes in its own right. I know that Its sometimes a phrase that is met with quizzical looks. However, when you think about it, it is obvious to us when we work with firms to implement SM&CR. Too often, we see project teams working hard to “implement the regime” but not spending sufficient time in assisting the “transfer into BAU”. The risk here is obvious, but a really important one, and a ‘mistake’ we see being made time and again. If SMCR is not embedded into a firm’s BAU processes, then all the hard work spend on implementation will go to waste and put the firm at risk of being non-compliant.   

Embedding SMCR means two things; firstly, having capable people assigned to the ongoing management of SMCR and secondly that these people have the ‘tools to do the job’. Although we can’t help with the first, we come into our own when providing the ‘tools to do the SMCR job’.

Regtech is a relatively new phrase in the regulatory landscape but describes vendors like us that both understand the regulatory requirements and have the software solutions to meet those regulatory needs.  What is even better is that when the Worksmart team do it, we do it with business process improvements in mind as well.

Firms want value for money and vendors like us need to continue to think “value add” when developing operational solutions. For us, delivering regulatory compliance is not enough, we need to add value as well. That is what sets us apart and has underpinned our success to date, but we are well aware that it is something, like SMCR, we need to live and breathe if we want to succeed in the future.

For more information on Accord, contact our friendly and knowledgeable team on: 01908 613613 or email us on:



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