FCA Statement on Expectations of Solo-Regulated Firms
On April 3 the UK’s Financial Conduct Authority (FCA) published a statement setting out its expectations for solo-regulated firms applying the Senior Managers and Certification Regime (SM&CR) during the COVID-19 pandemic (the Statement).
In the Statement, the FCA clarifies that it does not require firms to have a single senior manager responsible for the COVID-19 pandemic response. Firms should allocate these responsibilities in the way which best enables them to manage their own risks. The Statement also explores a number of other requirements under the SM&CR, including:
the FCA does not intend to enforce the requirement on firms to submit updated statements of responsibilities, provided that the change is made to cover multiple sicknesses or other temporary changes in direct response to the COVID-19 pandemic. Such arrangements should be temporary and firms are expected to revert to their previous arrangements. The FCA expects firms to clearly document such changes;
the FCA intends to issue a modification by consent to the 12-week rule to support firms using temporary arrangements. Under the modification, firms are able to allocate prescribed responsibilities of the absent senior manager to an individual standing in for the absent senior manager. Firms are expected to clearly document these responsibilities;
the FCA does not expect firms to submit an updated statement of responsibilities of the absent senior manager or of the individual taking on the absent senior managers responsibilities;
the FCA notes that there may be cases where a senior manager is furloughed if they are unable to fulfill their responsibilities, for example due to illness, caring responsibilities or if they have no current practical responsibilities. Furloughed senior managers will retain their FCA senior manager approval during their absence, unless they permanently leave their post; and
firms should reallocate the prescribed responsibilities of a furloughed senior manager to another senior manager or to the individual acting as the senior manager’s replacement. Individuals performing required functions should only be furloughed as a last resort.
The Statement is available here.