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| (1) Description of component of the regime | (2) Handbook provisions | (3) Application to solo-regulated firms |
|---|---|---|
| The senior managers regime: Parts that apply to all firms | ||
| Pre-approval by the FCA of senior management (the FCA Handbook calls senior management subject to pre-approval SMF managers) | SUP 10C | Applies to all solo-regulated firms |
| Firm to be satisfied that a person is fit and proper before applying for them to be approved as an SMF manager by the FCA or PRA | This requirement is in section 60A of the Act. There is guidance on it in SUP 10C.10.14G (Vetting of candidates by the firm). | Applies to all solo-regulated firms |
| Annual assessment of fitness and propriety by the SMF managers’ firms | This requirement is in section 63(2A) of the Act. There is guidance and related notification obligations in SUP 10C.14.18R to SUP 10C.14.25G (Notifications about fitness, disciplinary action and breaches of COCON). | Applies to all solo-regulated firms |
| A firm should carry out criminal records checks before applying for someone to be approved as an SMF manager | SUP 10C.10.16R (Criminal records checks and verifying fitness and properness) | Applies to all solo-regulated firms except for a sole trader without employees |
| A firm should ask for a regulatory reference before appointing someone to be an SMF manager, or to certain other senior management positions, and give one if asked to by another firm doing so | SYSC 22 (Regulatory references) | Obligation to give a reference applies to all solo-regulated firms.
Obligation to ask for one applies to all solo-regulated firms except for a sole trader without employees. |
| Statements of responsibilities
This is a document that sets out the responsibilities that an SMF manager performs as part of their designated senior management function. It is prepared as part of the firm’s application to the FCA or (if the firm is a PRA-authorised person) PRA for them to be approved as an SMF manager. It should be updated after approval when there has been any significant change in the responsibilities of the SMF manager |
SUP 10C.11 (Statements of responsibilities).
Many of the requirements are in the Act itself but they are summarised in SUP 10C.11. SUP 10C.11 also adds some further requirements, particularly about there being one statement of responsibilities per SMF manager per firm. |
Applies to all solo-regulated firms |
| Duty of responsibility
This applies to SMF managers in all types of firm. |
This is dealt with in section 66A(5) of the Act.
There is guidance on this in DEPP 6.2.9-AG to DEPP 6.2.9-FG. |
Applies to all solo-regulated firms |
| The senior managers regime: Parts that apply to many firms | ||
| A firm should allocate certain specified management responsibilities among its SMF managers
The FCA Handbook calls them FCA-prescribed senior management responsibilities |
SYSC 24 (Senior managers and certification regime: Allocation of prescribed responsibilities) | Does not apply to a limited scope SMCR firm.
Applies to a core SMCR firm and an enhanced scope SMCR firm. |
| A firm solo-regulated by the FCA should carry out criminal records checks before appointing a board director who is not an SMF manager | SYSC 23.4 (Criminal record checks for non-executive directors) | Does not apply to a limited scope SMCR firm.
Applies to a core SMCR firm and an enhanced scope SMCR firm. |
| The certification regime | ||
| A firm should not permit an employee to carry out certain functions (certification functions) unless it has issued them with a certificate.
The certificate is only valid for a year. The firm will have to renew it if the employee is to carry on performing the function. A firm may not issue or renew a certificate unless it is satisfied that the person is fit and proper. Certification does not involve pre-approval by the FCA or PRA. |
Most of the requirements of this regime are in sections 63E (Certification of employees by authorised persons) and 63F (Issuing of certificates) of the Act.
SYSC 27 (Senior managers and certification regime: Certification regime) describes the regime and explains which employees are covered. |
Applies to all solo-regulated firms except for internally managed AIFs and certain firms that only carry out benchmark activities. |
| A firm should ask for a regulatory reference before appointing someone to perform an FCA certification function (or a PRA equivalent) and give one if asked to by another firm doing so. | SYSC 22 (Regulatory references) | Applies to all solo-regulated firms |
| A firm must report information to the FCA about its Directory persons, including its certification employees. | SUP 16.26 (Reporting of information about Directory persons) | Applies to all solo-regulated firms |
| Conduct rules (applies to all firms) | ||
| Rules of conduct that apply directly to a firm’s workforce other than ancillary staff | COCON | Applies to all solo-regulated firms |
| A firm should report breaches of COCON to the FCA | Section 64C of the Act (Requirement for authorised persons to notify regulator of disciplinary action) and SUP 15.11 (Notification of COCON breaches and disciplinary action) | Applies to all solo-regulated firms |
| A firm should:
(a) ensure that all persons subject to COCON are notified of the rules that apply to them; and (b) take all reasonable steps to ensure that they understand how COCON applies to them |
These obligations are in section 64B of the Act (Rules of conduct: responsibilities of authorised persons).
There is guidance in COCON 2.3 (Firms: Training and breaches). |
Applies to all solo-regulated firms |