An important element of the senior managers and certification regime (SM&CR) is making sure that staff in key jobs are fit and proper to perform their roles.
Various SM&CR deadlines have been extended to allow firms significantly affected by the coronavirus pandemic extra time to make the necessary changes.
However, it's worth remembering that the first annual fit and proper assessment for those holding a senior manager function (SMF) should still be completed before 8 December.
The fit and proper assessment of a senior manager shouldn't be confused with a fit and proper assessment of someone who holds a certification function, for example an adviser or supervisor.
While the deadline for assessing certified staff has been extended until 31 March 2021, the cut-off date for the annual fit and proper assessment of senior managers has not been extended.
As such, firms should plan to complete this assessment before 8 December.
The FCA expects firms to make sure that all senior managers are assessed as fit and proper to carry out their responsibilities as set out in their statement of responsibility (SOR).
Assessments should be carried out at least annually, and the rules relating to assessing fitness and propriety are in the FCA's FIT rulebook.
As a minimum this will include an assessment of a person's:
- Honesty, integrity and reputation
- Competence and capability
- Financial soundness
We'd suggest you also carry out the following:
- A criminal record check
- A review of the SOR to make sure this remains relevant and up to date based on the current role performed by the senior manager
- A review of the person’s job description, so that it remains current and reflects the role they perform
On criminal record checks, this doesn't apply to sole traders, as they don't have to obtain a criminal record check on themselves.
A criminal record check is mandatory though when appointing a new senior manager.
We recommend that criminal record checks are made part of the annual fit and proper assessment, and done before any certificate is issued.
For firms carrying out criminal record checks, details of the disclosure and disbarring services for each UK country can be found below:
The final thing to note here is that the FCA expects firms to also apply their own judgement when assessing fitness and propriety.
For example, you may want to answer the broader question of whether a particular senior manager has adhered to the firm’s culture.