The proposed regulations represent a profound change in the UK regulatory structure and will affect firms in their relationship with the regulator, in the way they operate, and in their relationship with those who work for them.
On 26 July 2017, the FCA published its long awaited consultation paper on extending the Senior Managers and Certification Regime (SM&CR) – already applied to deposit takers and insurance firms since March 2016 – across the remaining 47,000 regulated firms. The consultation period closed in November 2017, and in December the FCA and PRA published their consultations on the transition arrangements for moving into the new regime. Included are new chapters on the transition arrangements and insight from discussions with firms.
For the majority of firms, implementation is not likely until 2019. However, firms should start thinking now about the regulation’s impacts, both directly and in their future relationship with the regulator. This is not primarily for the usual reason ensuring the necessary changes to business systems and processes are completed in good time. Rather because for many firms the long-term cultural impact of the SM&CR is likely to be significant and there is a risk of creating unwanted incentives and consequences if sufficient thinking is not done upfront.
Starting with understanding the detail of the FCA regime – there are six variations or flavours, depending on your size and business - we will advise you on the compliance approach most suited to you, together with our view of its potential impact on your firm’s culture and values.
How to thrive in the new regulatory climate [ 1853 kb ] [ 754 kb ] provides guidance to navigate the new accountability regimes, including a summary of what they will mean for your firm. Reflecting on the profound nature of this new regulatory approach, we dig below the surface and provide insight into how it may change the way your firm operates – practically and behaviourally – and how the regulator may apply it.
