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Senior Managers & Certification Regime (SMCR) December 2019

SMCR : Motor Dealers : What do you need to do

1. Confirming your firm's classification

Confirming classification and understanding where your firm sits within the Regime is the first step required. The FCA categorises firms into three separate areas and the extent of the actions required vary for each of these.

2. Decide your Senior Management Functions

The next step for any firm is to consider who will hold a Senior Management Function (SMF). An SMF is defined by the FCA as ‘a new type of controlled function under the Financial Services and Markets Act 2000)’. In reality, it is likely to be similar to those already covered by the Approved Person’s Regime (APR). However, this is a good opportunity to ensure that people truly understand the extent of their responsibilities, because you need to be able to evidence that they have accepted these responsibilities if challenged. Consider how you may be able to demonstrate ‘Point in Time’ evidence of this, at short notice if challenged.

3. Who is in and who is not

Other staff who will fit within the Certification Regime must also be decided on.

4. Create Statements of Responsibility (SoRs)

The next part of the process is creating Statement of Responsibilities (SoRs); a single document that every Senior Manager (those that hold functions) will need to have, that sets out their role and responsibilities. This document needs to be self-contained, not referring to other documents. You may need to send this to the FCA on request so ideally it should be centrally held and easily accessible.

5. Assessment of fitness and propriety and issuance of certificates to in-scope individuals;

The guidance within FIT states that firms should look at issues such as: whether the individual has been convicted of a criminal offence (including the nature of any offence, when it was committed, whether there is evidence of the individual having been rehabilitated etc), in the form of a DBS check. Whether they have been the subject of any justified complaint relating to regulated activities, whether they have been dismissed or asked to resign or resigned from employment or from a position of trust, fiduciary appointment or similar, whether they have ever been disqualified from acting as a director or disqualified from acting in any managerial capacity, whether, in the past, they have been candid and truthful in all of their dealings with any regulatory body and demonstrated a readiness and willingness to comply with the requirements and standards of the regulatory system and with other legal, regulatory and professional requirements and standards. Whether they have been subject to an adverse finding in civil proceedings (particularly in connection with an investment or other financial business, misconduct, fraud or the formation or management of a body corporate). Whether they have been the subject of, or interviewed, in respect of any investigation or disciplinary proceedings by a regulator, whether they have contravened any of the requirements and standards of the regulatory system or other regulatory authorities.

6. Embed good practice

Good practice requires changes to existing contractual arrangements to reflect the SMCR and Certification Regime. This not only emphasises the importance of these requirements to staff but also highlights to the FCA the regime is being taken seriously. This also provides the opportunity to show support and protection towards staff in response to any breach that occurs.

7. Employ a system to demonstrate your evidence

Finally, internal policies and practices will likely need to be modified to accommodate the changes imposed by the extended Senior Management and Certification Regime

You do have an option, appointed representatives of Automotive Compliance are out of scope for SMCR, to become a FULL Appointed Representative …

Call: 01452 671570
Email: info@automotive-compliance.co.uk requesting a callback
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