SM&CR – Statement of Responsibilities

Overcoming the confusion around Statement of Responsibility templates

July 2019

Steve Bailey

Director, ATEB Compliance

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Risk Disclaimer

The information, opinions, estimates or forecasts contained in this article were obtained from sources reasonably believed to be reliable and are subject to change at any time. It has been produced for information only.

Views and opinions should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned. We do not provide tax, accounting, regulatory or legal advice. No action must be taken or refrained from being taken based on this content alone.

Key takeaways:

  • Understand what should be included in the Statement of Responsibilities (SoR) required by the SM and CR regime
  • Understand who requires an SoR under the new regime

If you have read anything about the Senior Managers and Certification Regime (SM&CR), you will know that each Senior Manager will need to have a Statement of Responsibilities (SoR). You might even have looked around for a template SoR. And you might have ended up a bit confused!

An initial search could well have taken you to the FCA final guidance paper ‘FG19/2 Senior Managers and Certification Regime: Guidance on statements of responsibilities and Responsibilities Maps for FCA firms’

However, despite the title promising much, this paper is more about how to identify the SM&CR elements of an individual’s roles and how to complete a SoR.

After much rummaging about in the FCA Handbook and various other places, you might have ended up at SUP 10C Annex 10D, where a link to what purports to be a SoR can be found. Hallelujah! Eureka!

But don’t celebrate too soon. The form found here purports to be a SoR and also suggests that it is mandatory. Neither is true.

First, the form relates to dual-regulated firms (firms regulated by both the FCA and the PRA) and so, by definition, is not suitable for use by FCA solo-regulated firms that the SM&CR is being extended to in December 2019. The equivalent form for solo-regulated firms can instead be found at page 391 of policy statement PS 18/14. (Note that the page is not actually numbered as such, you need to go by the page numbers shown in your PDF reader.)

This ‘template’ will be available on Connect from 9th September 2019.

The second issue is a confusion over the nature of this form. The notes suggest that it is mandatory but in fact it is only the information and format of the presentation of the information to the FCA that must be done according to this form. Beyond that, it is not really a template at all. 

At a pinch, firms could use this template in paper form as is, but it is neither very user-friendly, nor, at 23 pages plus a further 3 pages of annex, does it remotely meet the FCA’s guidance on creating an SoR which is that a SoR should be a single document describing what the Senior Manager is accountable for, must be as brief as possible, self-contained without reference to other documents, succinct and clear without unnecessary detail.

In practice, when an application for approval (e.g. Form A) is submitted to the FCA, the SoR will need to be submitted to the FCA into Connect in the format on the ‘template’. The system will generate the form as part of the application. But, since there is likely to be a degree of transposing of information anyway, we think that firms might prefer to create a more user-friendly version for internal use, which is easier to use, but still follows the format of the Connect version so facilitating ultimate transposition to Connect.

Risk Disclaimer

The information, opinions, estimates or forecasts contained in this article were obtained from sources reasonably believed to be reliable and are subject to change at any time. It has been produced for information only.

Views and opinions should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned. We do not provide tax, accounting, regulatory or legal advice. No action must be taken or refrained from being taken based on this content alone.

Our view

Firms will need to create or acquire a whole range of new documentation to support implementation of SM&CR. HR processes, including recruitment, appraisal and disciplinary processes and contracts of employment will all need to be reviewed and amended as required.

ATEB can help with many of these aspects.

Finally, you may be aware that existing Senior Managers who will have the same role after 9 December will be automatically converted from the existing CF function to the new SMF function. Where an individual in a solo-regulated firm is auto-enrolled (converted) into Senior Management Functions, there is no need to send a SoR to the FCA, but the individual will still need to have one so our SoR template could take one SM&CR task off your desk.

Action required by you

  • For further information or help with SM&CR, contact your usual ATEB Consultant, or contact ATEB directly here.

 

ATEB Consulting is a trading name of ATEB Business Solutions Limited Registered in England & Wales Reg. No: 5075208. Registered office: Evolve Business Centre, Cygnet Way, Houghton-le-Spring, County Durham, DH4 5QY

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