SM&CR Implementation Tasks (Part 3) | 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 Training Tasks. Here we will be discussing Governance Tasks.

Governance Tasks – Not just for Enhanced Firms!

Because the regime for the wider market has been split and we have the notion of Limited, Core and Enhanced Firms, we’ve been asked the question, ‘Surely all those governance tasks belong only to the Enhanced Firms, don’t they?’.  Absolutely not would be our answer.

The governance tasks that exist, of which there are many, can and should be applied to any organisation bearing in mind the whole purpose of this regime is about having better structured, better organised businesses run by more competent people.

Have a look at your committee Structure and ask, ‘Does it give us what we need? Has it just grown up over the years and do we need to do something different? If so – now could be the time to do it.

Think about the Board and the matters reserved for the Board. Do they need updating? Are they still relevant to your business going forward or do you need to make any changes?

In addition to that, each of your Committees should have their own Terms of Reference. These terms of Reference should talk about the purpose of the Committee, what it’s decision-making powers are, who should be involved in that Committee and so on. Again, we would recommend that you re-visit those and make the appropriate updates prior to the implementation of SM&CR.

A question that has come to light as part of the project implementations that we’ve done is, how do you evidence who does what in Committees? Whilst Board meetings are very well documented, with papers stored for those involved, this is not always the case with Committee meetings. Have a think about who attends the meetings? Who are the Chairs? Who are members as opposed to attendees? How are you going to evidence the output of each meeting and what actions are carried out? How will you evidence who was present and who was not there when they should have been?

Prescribed Responsibilities

Depending on the size of your firm, you will have either a small or large number of Prescribed Responsibilities to allocate to your Senior Managers. A very good governance check is not only to allocate your Prescribed Responsibilities to people but also to consider them against the Committees that you have and then you can do a cross check to see whether your committee membership is relevant to the accountabilities that you believe belong to it.

Key Functions

On a final note, (this only applies to Enhanced Firms, but we would advocate that Core Firms do this as well), the FCA have provided a list of around 30 Key Functions. The Banks had to do a mapping exercise that said for each of the Key Functions, who has got overall responsibility within the business for managing that function? If there were any gaps, the FCA would then expect a business to review their structures and their reporting lines and ensure that each business area was effectively oversighted by the most appropriate SMF Function holder.

We advocate that all businesses should go through this and look at it and ask themselves, are we sure we have got a Senior Manager who is responsible and accountable for each of those business areas? It then makes life easier when you are reviewing your committees and committee structures.

 Look out for our next instalment, ‘SM&CR: Implementation tasks Part 4 – Employment Tasks’ Coming soon!


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