What does the extension of the SM&CR implementation period mean for solo-regulated firms?

In a year of major disruption due to Covid-19, it’s perhaps no surprise that the FCA announced in the summer that the deadline for some elements of the Senior Managers & Certification Regime (SM&CR) would be extended.

Whatever challenges they have faced, the FCA has always stressed that professionals must demonstrate the right competencies to manage risk, comply with the regulations and create positive cultures, in order to deliver a high standard of customer outcomes.  

Originally set for 9th December, solo-regulated firms now have until 31st March 2021 to complete the first assessment of the ‘fitness and propriety of their Certified Persons’ and deliver Conduct Rules training to the rest of the staff. Those in SMFs and certified roles should have received initial training prior to December 2019.

Wherever possible, however, firms are encouraged to submit details of certified employees as soon as possible so that they can be published in the FCA’s directory. The regulator has also outlined the requirements for Conduct Rules training for solo-regulated firms in this video

In a nutshell, the FCA expects training to be interactive, realistic, challenging and that staff should know what a breach looks like in relation to their role. It also points out that designing and implementing effective training takes time.

Why does getting it right matter?

Of course, people don’t necessarily set out to break rules but failure to understand what they mean in the context of the role can and does lead to firms falling foul of the regulator. With staff working remotely it is even more important to make sure nothing is left to chance.

One £30million fine issued by the FCA last year demonstrates what can happen when systemic management failures lead to ‘unfair outcomes’ for some customers. The firm ‘failed to adequately monitor calls between call handlers and customers and provide sufficient management information to enable senior management to identify failings in relation to the quality and volume of call monitoring’. This is a clear breach of Conduct Rule 2: ‘You must act with due skill, care and diligence.’

Getting it right

The benefit of an eLearning system, as part of an overall blended solution, is that it can do much of the heavy lifting for you, leaving the time and budget to address the more complex requirements

With content readily available via our cloud-based LMS, professionals can undertake fundamental training at a time to suit them, whether they’re working from home or in the office.

We work closely with FSTP (Financial Services Training Partners) to ensure all eLearning content meets the FCA requirements, and our Conduct Rules training delivers more than 40 role-specific case studies, along with interactive questions to engage learners. Far from being a tick-box exercise, employees gain a deep understanding of their obligations and can understand how it applies to their role.

As Philippa Grocott, Partner at FSTP told us: “The writing has been on the wall for some time regarding Conduct Rules training. Back in August 2019 the FCA issued the Senior Managers and Certification Regime Banking Stocktake Report. It highlighted: ‘Evidence suggested that firms have not always sufficiently tailored their Conduct Rules training to staff job roles and many firms were often unable to explain what a conduct breach looked like in the context of their business’.

“Our experience at FSTP echoes this. This coupled with the video they recently shared indicates to us they want firms to take the right approach – sending out a generic PowerPoint just won’t cut it. Banks that took the high-level generic approach previously are now working with us to deliver the correct approach.”

While some firms will no doubt welcome the extension of the FCA’s SM&CR deadline, those who have systems in place to deliver eLearning and track the progress with all of their training interventions are likely to be ahead already. The quality and relevance of the content, and the ability to access it anytime-anywhere, means that professionals at all levels have a clear impetus to complete their training in good time.

Download our free guide, Mind The Compliance Gap Guide and other digital learning and compliance resources. Click here for our complete course collection, which includes a SM&CR suite.

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