Thu, Apr 9, 2020

SM&CR Transition Period - Time to Take Stock

Last year the financial services industry implemented the Senior Managers and Certification Regime (SM&CR) for solo regulated firms, which is now in a transitional period until December 2020.  After the global COVID-19 crisis abates, the Financial Conduct Authority (FCA) will seek to re-engage with firms to ensure that SM&CR has been robustly implemented by solo regulated firms.  

To this end, the key question Senior Managers and compliance officers should ask themselves are:

  • Did we implement what we intended to?
  • Is it working?
  • Does a positive customer centric culture prevail in the firm’s day-to-day operations under SM&CR, particularly decisions made during the COVID-19 period?

Why Think About This Now?

Given the COVID-19 global pandemic, firms are having to make many decisions driven by the needs of their customers in this difficult time—payment holidays, extension of overdraft, freezing payments, additional lending, withdrawals from long term investment; the list goes on. This means when making decisions at a rapid pace, senior managers must be assured that these decisions are not only made quickly, but with due consideration to the fair treatment of customers and without creating financial problems for consumers in the future. Further, these decisions not only impact customer but also the safety of a firms’ staff and suppliers.

How Duff & Phelps Can Help

Duff & Phelps is uniquely placed to help you and your firm review SM&CR arrangements ahead of the end of the transition period. We assess whether current decision-making processes and governance arrangements are robust enough to meet regulatory expectations and mitigate risks arising from SM&CR-related procedures from recruitment and certification/approvals through to handovers and regulatory references.


Using our secure electronic data storage facility and virtual meeting capabilities we can conduct remote reviews of SM&CR arrangements, including interviewing key individuals while they are working remotely. 

Our Approach

Our experts will assess the documentation and SM&CR framework against FCA requirements and expectations. This will cover a review of the original classification of the SM&CR firm and work its way through to regulatory references. We will request documentation that can be delivered to our secure data storage facility which can only be accessed by the Duff & Phelps staff engagement team.  Following review of the data we will conduct virtual interviews through calls and/or video conferencing to ensure we have interpreted the data correctly and gain answers to outstanding questions. It is likely that virtual meetings will be held with compliance officers, CEO’s and HR directors, although this list can be expanded depending on the nature and complexity of the organization.

We will provide a detailed report which will include our findings, together with a pragmatic recommendation for improvement.  

Read more about our SM&CR services here

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