On 14 August 2020, the FCA updated its web page concerning the Senior Managers and Certification Regime (SM&CR) for solo regulated firms by adding tables on good and poor practice in the areas of fitness and propriety and conduct rules.
The FCA reminds firms that they should demonstrate that they are making regular, thorough and consistent assessments of the fitness and propriety of senior managers and certification staff. In terms of positive indicators these include:
- Managers are adequately trained in the firm’s approach to fitness and propriety and understand what is expected of them.
- Fitness and propriety panels – which include senior managers – are convened to consider marginal cases.
- Firm has appropriate criteria and a robust process for identifying certification staff on an ongoing basis.
- Regulatory references disclose misconduct/relevant concerns and are produced in a timely manner.
When training staff on the conduct rules, positive indicators include:
- Line managers are involved in training delivery, not just HR or the project team.
- Training is reinforced regularly and built into on-boarding.
- Conduct is linked to fitness and propriety and performance assessments.
- Effectiveness of conduct rules training is assessed.