The FCA Senior Managers Regime has now been functioning in respect of banks and insurers for six months. The regime will be extended to all regulated financial services firms, including advisers from 2018, but the regulator has not so far been clear as to how it will apply to small firms.

Senior Managers Regime

The whole thrust of the programme is to hold senior managers more responsible for what happens within their areas of control to the extent, as a last resort, of fining individuals. A prerequisite of this is that firms are being required to define their command structures and spans of control more specifically than perhaps they have been used to doing. Going forward sections 4-9 of SYSC, while labelled ‘guidance’ should be treated as rules by all IFA firms. Firms should certainly pick up on this prior to imposition of the regime. If there are 2 or 3 directors, which is the mean for firms which we work with, allocate specific areas of responsibility. This does not detract from the responsibility which all directors have for the firm as a whole, but it does mean that if there is a serious failure in one specific area, you know who to measure for thumb screws.

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The above is the lead article in our latest monthly News Notes – November 2016.

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Haven Risk Management : FCA Compliance Consultants

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