Less than 2% of firms are fully prepared for SM&CR

August 15, 2019

A survey conducted on preparation for the FCA’s Senior Managers and Certification Regime, (SM&CR) has revealed that most firms have significant work to do, as they prepare for its extension to all authorised firms on 9 December 2019. 

From a pool of over 70 respondents, including asset managers, hedge funds, private equity firms, broker-dealers and wealth managers, the findings were as follows:  

•    Less than 2% of firms confirmed they had completed sufficient preparation for SM&CR
•    In equal measure, only 2% of employees had a sufficient awareness of the new rules and their implications across the organisation
•    More than a quarter of firms surveyed admitted there is minimal general awareness of SM&CR outside of the compliance teams  
•    Almost two thirds (60%) of firms surveyed are one-third, or less, of the way through their SM&CR projects 

According to Adam Palmer, Partner at ACA: “Without a doubt, solo-regulated firms need to accelerate the pace at which they are preparing for the SM&CR in the UK. It’s a long road ahead for 98% of firms and it’s clear the amount of work required ahead of the deadline is being underestimated. For some, the coming of this new regime will necessitate substantial changes to both governance and culture.”

Palmer continues: “There are new policies, processes, and documentation that solo-regulated firms must implement. The engagement that must take place with certain individual employees will take time if firms are prepared to make the necessary changes to their overall business culture required by the regulator. In addition, employees across the firm need to be trained on SM&CR individually, as it will in many cases touch on their day-to-day roles. It’s important for firms to start working on SM&CR in earnest today.” 

How ACA Can Help

To learn more about what your firm may need to do to prepare for SM&CR, listen to the ACA Compliance Group’s recent webinar, or visit our dedicated SM&CR resources page.

ACA offers SM&CR implementation planning and support services, as well as other solutions to help guide investment managers through this new regime, including open training courses.
For more information please call Sam Reid or Carl Day on +44 (0) 20 7042 0560