SM&CR Implementation Tasks (Part 2) | SMCR Software | 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.

What Can you and your firm do now?

This blog seeks to continue to help you plan your project for the implementation of the Senior Managers and Certification Regime within your organisation.

Often, people say to us that they don’t feel that they need to take any action now as the regime doesn’t start for a while and then there is another year from the start date to complete lots of other tasks. However, if you ask the Banking community, what would they would do differently, if they had to do this again? They would say they would take action far earlier.

Now, it would have been difficult for the Banking Community to do this as they had some quite short timelines from when the regulatory change was announced to achieving the deadlines for commencement. That said, there are some things (as in the slide below) that you can do now that will most definitely make your life easier as you get closer to your first regulatory deadline. Our earlier blog concentrated on HR Tasks. Here we will be discussing Training Tasks.

Training Tasks

With regard to all of the necessary training tasks – there is an extensive education needed around this particular regulatory change. If we start from the beginning, when you employ somebody – you need to be looking at your Induction Process. When you bring new people onboard, you need to consider how you will go about training them on the Tier One Conduct Rules that will apply to them.

You might even decide to train them on the Tier Two Conduct Rules depending on which role they undertake and whether they are reporting to an individual who will be subject to those themselves.

You might need to consider changing your Induction Sign-off processes, especially where Certified people are concerned. We know that Certified people cannot operate in their role unless they have got a Certificate to Act, therefore, you are going to have to find a way of assessing people at the end of an Induction process to be able to give them a certificate, if appropriate, to allow them to act.

In addition to this, there is the matter of, ‘prescribed responsibilities’. One of the Senior Managers in your business will have a responsibility that says they have to be sure that everybody has been trained in the Conduct Rules. Think about what assurance they will need to take comfort that this has been undertaken effectively. We know this task will have to be delegated to others, so think about – if it was you – What MI? What Process? What information? What Meetings would you want to be involved in that would assure you that everything is on order in that respect?

We know that the majority of businesses run annual appraisal processes but now that we have a wider regulatory process in the form of Certification, it’s likely that your performance appraisals will feed in to that to demonstrate employee competency. Bear in mind that with the Certification process there are implications: if you say you cannot certify someone, they cannot then fulfil their role.

We need to consider whether everybody is conducting and completing their performance appraisals in a similar manner. If the appraisal forms a large proportion of the material evidencing whether an individual is signed off as certified or not, you need to be sure as a business that the process is fair for everybody involved.

Duty of Responsibility

Any Senior Manager now has a, ‘Duty of Responsibility’ under the new regime to discharge their responsibilities effectively. There is an addition to their new and revised Conduct Rules that talks about, even where delegation is involved, that that must be over-sighted effectively. This comes back to a Senior Manager’s Duty of Responsibility. With this in mind, think about what assurance your Senior Managers are going to need as you go through this process, so they can meet their Duty of Responsibility with regard to ensuring that training is conducted effectively. Let this help to inform you about how you wish to run the project.

Finally, there has been quite a bit of feedback from the Banking communities around Certification.

When SM&CR rolled out in the Banking world it was very difficult because, whilst it was a new piece of regulation, nobody knew what it should look like in practice. Banks said to us that if they had their time again they would have undertaken a number of trial runs of the Certification process before they had to certificate people for the first time.

One of the reasons for that feedback was that there will be a number of staff involved in your Certification cycle. Depending on how you set this up within your organisation, you may have multiple individuals that have responsibility for signing off others. In order for you to follow that approach, you need to be comfortable that those individuals have the appropriate knowledge and skills in order to be able to sign off others effectively. You will need time and they will need training and input so consider that when you are developing your project plans.

Look out for our next instalment, ‘SM&CR: Implementation tasks Part 3 – Governance tasks’ Coming soon!


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