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Following the FCA consultation paper issued yesterday entitled “Optimising the Senior Managers & Certification Regime and feedback to DP16/4 – Overall responsibility and the legal function” Jane Stoakes, Director, Compliance & Regulatory Consulting at Duff & Phelps commented:
“We welcome these recent proposed updates and clarifications to the SM&CR rules. If the FCA wants companies to implement these practices properly, it’s imperative that companies have a clear understanding of what changes need to be made, and implement these well in advance of the cutoff date on 6th December. In response to the industry’s confusion in certain areas, the FCA’s proposals have provided further clarification on how the client dealing function should be applied, how staff who are responsible for systems and controls will be included in the Certification Regime and provided a solution to the legal function issue.”
“Changes to some of the certification rules, such as the proposal that brings a person who is not approved but who is responsible for systems and controls into the scope of certification is a pragmatic amendment as this is an important role within a firm. Similarly, the decision to exclude the Head of Legal from the Senior Management Regime but include it in the Certification Regime is a good solution to this much discussed issue. Whilst legal privilege may restrict the FCA from using its powers over Senior Managers, most of the benefits of the Senior Managers regime can be gained by including these individuals in the Certification Regime. Each of these steps will help companies to hold individuals accountable for their actions in a practical way and hopefully companies will now have a better understanding of how to make these changes.”
