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Senior Managers and Certification Regime (SMCR) – Implementation Challenges and Enforcement Outcomes

Posted on 28 January 2020

9 December 2019 was the implementation date for the wider roll-out of SMCR bringing most firms authorised by the FCA only (solo-regulated firms), into the regime.  For more details, see our last edition of Enforcement Watch 'SMCR Implementation Challenges for Solo-Regulated Firms' and our dedicated SMCR webpage. From an enforcement perspective, this means the wide-spread application throughout the UK regulated sector of the FCA's Code of Conduct and the Duty of Responsibility for Senior Managers.  Although it is still relatively early days, we may also start to see details of some Enforcement outcomes from the initial roll-out of SMCR, and that will provide some further insight into how the FCA intends to operate in this new enforcement landscape. 

There also remain some implementation challenges for solo-regulated firms in 2020.  Of particular note is the requirement to conduct the first annual assessment of whether Certified staff are "fit and proper", by 9 December 2020.  Whilst authorised firms will be used to considering "fitness and propriety" in the context of disciplinary matters or dismissal, the certification process will require engagement with issues such as on-going training, competence and also the nebulous concept of "personal characteristics".

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