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Paradigm launches guide to Senior Managers and Certification Regime for DAs

  • 18/03/2019
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Paradigm launches guide to Senior Managers and Certification Regime for DAs
Paradigm Mortgage Services has launched a free guide for all directly authorised (DA) advice firms covering their responsibilities under the Financial Conduct Authority’s Senior Managers and Certification Regime (SM&CR).


The guide is available to all advisers, not just members of Paradigm, and the club’s mortgages technical director Christine Newell will be providing support at its 2019 mortgage masterclasses.

The overriding requirement that the SM&CR brings about for financial services firms is that senior management must evidence good culture and ethics, and this is to be driven from the top, Paradigm said.

Senior management will also be expected to write their own ‘statement of responsibility’ (SOR) to confirm the personal responsibility they are taking for the conduct of their firm.

And senior managers will also certify annually that certain individuals within the firm are fit and proper, and competent to perform a controlled function.

The guide also analyses where the duty of responsibility lies, where firms should start in terms of their preparations for the new regime, and the immediate actions that are required.

As it stands, advisory firms are currently regulated under the FCA’s Approved Persons Regime however this will be replaced by the SM&CR from the 9th December 2019.

The SM&CR has been in place in the banking industry from March 2016 and came into force for product providers in December 2018.


Leadership and culture

Bob Hunt, chief executive of Paradigm Mortgage Services (pictured), said that with less than 270 days to go until the implementation of the SM&CR regime, advisory firms should be undertaking the work required in order to ensure they meet the new standards.

He added: “The SM&CR is all about leadership and culture within a regulated advisory firm. The clear expectation is that business owners take the lead in this and, not only take responsibility for their own actions but also leading their entire firm.

“It also means that every member of staff who interacts with a customer or performs a role that could affect the outcome of any advice or services provided to that customer must meet a certain standard of behaviour set by the business owners, and that they adhere to the conduct rules at all times.”

Hunt noted that the guide steered firms in the right direction so they can begin work immediately and ensure they meet the deadline.

“Given this is an industry-wide issue, we’re very pleased to make this available to all intermediary firms, as part of our ongoing support to firms ahead of SM&CR,” he continued.

“In addition to the support available on our website, directly authorised firms attending one of our CPD events will also benefit from detailed information and analysis from Paradigm staff in order to help them fulfil their SM&CR obligations.”


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