The FCA recently announced on 30 June, a delay in the deadline for the first certification of staff (and some other requirements) under SMCR. The deadline has been delayed until 31 March 2021 to give firms significantly affected by the coronavirus pandemic time to make the changes they need. The original deadline for solo-regulated firms to have undertaken the first assessment of the fitness and propriety of their Certified Persons was set for 9 December 2020.
The FCA process
Consultation: To ensure SM&CR deadlines remain consistent, and to provide extra time for firms that need it, the FCA will consult on extending the deadline for the following requirements from 9 December 2020 to 31 March 2021:
- the date the Conduct Rules come into force in respect of Conduct Rules Staff (the Conduct Rules already apply to Senior Managers and Certified Persons);
- the deadline for submission of information about Directory Persons to the Register;
- references in FCA rules to the deadline for assessing Certified Persons as fit and proper (which has been agreed by the Treasury).
No indication on the timing of the consultation is given other than that it will occur alongside the parliamentary process, to allow it to finalise its policy as soon as possible.
Certification: firms are advised to certify staff earlier than March 2021 if they are in a position to do so.
The FCA also emphasises that firms should not wait to remove staff who are not fit and proper from certified roles.
Register: The FCA will still publish details of certified employees of solo firms starting from 9 December 2020 on the Financial Services Register. They are encouraging firms who are able to do so, to provide this information before March 2021.
SMCR is still high on the FCA agenda
David Blunt (Head of Conduct Specialists at FCA) confirmed at a webinar on 1 July 2020 hosted by City & Financial Global Professional that this extension of the deadline does not mean that SMCR has become less important for the FCA.
Far from it; the accountability culture that it exemplifies is even more important in a crisis. He hoped that this extra time will give firms and senior managers space to make sure that they have an adequate, robust and effective response to Coronavirus challenges (including a dispersed workforce) and that it will give firms time to ensure they are putting in place the highest standards of SMCR compliance.
Firms who are ready to certify (perhaps as part of their standard appraisal processes), or who have already devised training programmes that will make clear how the conduct rules apply in practice to individuals' roles, may well decide to push ahead to the original deadline. For others, this will be a welcome relief to have the additional time to put in place the necessary tools, systems, controls, and cultural checks needed for full compliance.
Please note this blog post was written by a Clifford Chance LLP employee. Clifford Chance LLP is the parent company of Clifford Chance Applied Solutions (CCAS). The content within this post does not constitute legal advice.
The certification and training deadline has been delayed until 31 March 2021 to give firms significantly affected by the coronavirus pandemic time to make the changes they need