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Bankhall launches Senior Managers and Certification Regime support hub

  • 08/02/2019
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Bankhall has launched a support hub covering the Senior Managers and Certification Regime (SM&CR), aimed at helping directly authorised (DA) firms to embed the new regulatory changes that will come into force later this year.


This comes after the Financial Conduct Authority (FCA) announced that it will be extending the SM&CR to around 47,000 solo-regulated firms in December 2019.

Bankhall’s SM&CR guidance is applicable to all firms regulated by the FCA across pensions, investments, mortgages and protection.

The hub provides an overview of the SM&CR and explains how firms will fall into the different tiers of the regime, which will be determined by the size and structure of each firm.

Guidance from Bankhall sets out how all the elements of the new regime will apply to the three different tiers: limited scope, core and enhanced. Firms will be able to establish which tier applies to their firm, along with the actions they need to take to comply with the new regime.


Mortgage advisers will appear on FCA’s register

Carl Wallis, head of group compliance at Bankhall, told Mortgage Solutions that for the first time, approval of mortgage advisers will be the same as approval for investment advisers.

He added: “Mortgage firms will be required to certify their advising staff, and certain other staff, on an annual basis. Many mortgage firms will already carry out competence checks, along with fitness and propriety checks, when they take on advisers – and also on a regular basis thereafter.

“However, these processes will now need to be formalised and strengthened ahead of the implementation of the new SM&CR regime. In addition, almost all staff will be subject to new conduct rules, and mortgage firms will need to ensure that staff receive training on these.

“Also, for the first time, all mortgage advisers will appear on the FCA’s register, which will be renamed ‘The Directory’. This is a positive step, which has the potential to enhance the reputation of mortgage advice as a profession. It should provide further reassurance and confidence to customers as to the status of the adviser they are dealing with.

“Firms themselves will be responsible for ensuring the accuracy of information on the directory, and it’s likely that standing data and approvals processes will need to be reviewed to ensure that they meet the new FCA requirements.”


Prepare early

The club said it will continue to develop its SM&CR Hub to provide firms with additional assistance in complying with the regime. This will include videos and frequently asked questions from firms, along with practical examples, such as statements of responsibility.

Carl Wallis said that it is important that firms start to prepare early for the SM&CR to fully understand the impact on their businesses.

He added: “We are already working with firms on a one to one basis to help them understand what the SM&CR means for their individual businesses.

“We know that larger firms, in particular, risk running out of time if they don’t engage and understand the work involved, as it’s likely to lead to fundamental discussions at a senior level in terms of governance structures and the boundaries of responsibility for each individual senior manager.

He explained that the SM&CR aims to increase individual accountability and ensure it is easy to establish exactly who is responsible for what within firms.

“One of the key things we would stress is that implementation should be much more than a compliance exercise; treating it as such largely misses the point of the regime, which is about ownership, accountability and the culture that exists across all senior managers within each firm,” Wallis continued.

“We will continue to develop the support on our SM&CR Hub ahead of the final FCA rules followed by implementation on 9 December 2019.”

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