We have been living under the SM&CR regime now for over 18 months and with all the associated original action deadlines, deadlines that were extended and have now passed and the on-going actions yet to come, now is a really good time to take stock of just where we are now as we continue to embed the new regime into our firm’s culture.  

    In part 2, we will look at how firms may approach the five Code of Conduct questions. 

    Time to take stock. 

    Where are we now? 

    With so many deadlines, coming and going recently, now might be a good time to reflect on exactly where we are in terms of the key SM&CR tasks that have already been completed and what tasks are needed to be performed going forward. 

    Key task Timescale Paradigm comment

    Code of Conduct Training for SMF and Certification staff 

    The FCA expect regular training to be undertaken (Paradigm takes this to be at least annually). 

    Firms would have conducted training to abide by the Code of Conduct rules for SMF’s and Certification staff prior to 9.12.19. 

    Firms should be looking at planning the next training for all remaining staff no later than 12m from the last training provided. 

    Firms should have clear plans to conduct refresher training at least annually, for SMF and Certification staff to abide by the code of conduct rules.  

    Senior Managers

    The initial Fit & Proper assessment of SMF’s would have been completed no later than 08.12.2020 

    The next deadline to conduct the annual F&P assessment is 12m from the original assessment or no later than 08.12.2021. 

    Firms should have clear plans to conduct their next F&P assessment of SMF’s within 12m of their last assessment.  

    Certification

    The original date to complete the Certification process was 9.12.2020, this was extended due to the Pandemic until 31.03.2021. 

    The next deadline to complete the annual certification assessment is 12m from the original assessment 8.12.21 or no later than 31.3.2022, for those firms that took advantage of the extended deadline. 

    Firms should have clear plans to conduct their next Certification assessment of advisers and supervisors within 12m of their last assessment.  

    Code of Conduct Training

    The FCA expect regular training to be undertaken (Paradigm takes this to be at least annually). 

    Firms would have conducted training to abide by the Code of Conduct rules for all remaining staff by either 9.12.20 or if they took advantage of the extension complete this by 31.3.21. 

    The next deadline to complete training for the remaining staff who fall under the code of conduct rules is 08.12.21 or 30.03.22 for those firms that took advantage of the extended deadline.  

    Firms should have clear plans to conduct refresher training for the remaining staff subject to the code of conduct rules, within 12m of the last training completed. 

    SMCR Breach Reporting

    Where disciplinary action* has been taken against a member of staff for breaches in any of the code of conduct rules:

    The FCA require all firms to report where an SMF has breached any of the tier 1 or 2 code of conduct rules. These are reported using Form D (or Form C where the individual no longer performs an SMF function

    Firms are required to report all other breaches by any other member of staff using the REP008 report within the Regdata report. 

    Disciplinary action means: 

    • Issuing a formal written warning 
    • Suspension or dismissal of a person, or 
    • Reduction or recovery of remuneration (clawback) 

    Within 7 days of breach occurring. 

    Annually (using Regdata)

    Firms must have in place reporting procedures to ensure that the on-going reporting requirements are always going to be met in line with FCA requirements. 

    FCA Directory

    Firms were expected to upload their entries no later than 09.12.20, or by 31.03.2021 if firms wanted to make use of the extended deadline.  

    Firms have 7 working days to make changes to their Directory entries, for example, when people join/ leave or activities change. 

    Firms should have clear plans to update and attest the adviser’s details on the Directory within 12m of uploading the original adviser details and then on an annual basis. 

    Hopefully this is a useful reminder to firms so that they know exactly where they are in relation to all the deadlines that have come and gone since the introduction of the new regime. 

    Case Study 1 (Ahead of the Game Mortgage Advisers (AGMA) Limited) 

    Stock take income AGMA Actions

    Code of Conduct Training for SMF and Certification staff 

    AGMA were quick out the blocks and completed this training 01.10.2019, thereafter 30.09.2020. 

    Senior Managers (F&P assessment) 

    Again, AGMA were well within the required timescale and completed this assessment 01.12.2020. 

    As a result of the quick stock take, AGMA now has a very clear picture of where they are at. 

    Certification 

    AGMA did not take advantage of the extended deadline and completed the Certification process 01.12.2020. 

    They have scheduled in an agenda item for the monthly senior managers meetings to ensure that they note any SMF or REP008 breaches and have not forgotten to make any required changes to the FCA Directory. 

    Code of Conduct Training 

    AGMA, again, did not take advantage of the extended deadline and completed their training for the remaining staff on 01.12.2020. 

    The firm has decided to complete the next annual refresher code of conduct training for all staff and the Certification process in September 2021 and have noted the deadline to conduct the next SMF F&P assessment no later than November 2021.   

    SMCR Breach Reporting 

    AGMA have not been required to make any SMF breach reports and completed their initial “nil” REP 008 return using Regdata.

    Case Study 2 (We do things Last Minute Wealth Advisers (WLMWA) Ltd) 

    Stock take income WLMWA Actions

    Code of Conduct Training for SMF and Certification staff 

    WLMWA completed this task 01.12.2019, thereafter 01.12.2020. 

    Senior Managers (F&P assessment) 

    WLMWA completed this assessment on 08.12.2020. 

    As a result of the quick stock take, WLMWA now has a very clear picture of where they are at. 

    Certification 

    WLMWA took advantage of the extended deadline and completed the Certification process 31.03.2021.

    They have scheduled in an agenda item for the monthly senior managers meetings to ensure that they note any SMF or REP008 breaches and have not forgotten to make any required changes to the FCA Directory. 

    Code of Conduct Training 

    WLMWA again, took advantage of the extended deadline and completed their training for the remaining staff on 31.03.2021. 

    The firm has decided that rather than have different dates for the code of conduct training, refresher training for all staff will be completed in November 2021 and then annually thereafter.  

    SMCR Breach Reporting 

    WLMWA have not been required to make any SMF breach reports and completed their initial “nil” REP 008 return using Regdata. 

    The firm has noted that the new SMF F&P assessment is required to be completed no later than 08.12.2021.   

     

    Summary 

    Firms can use the prompts above to record exactly when the key SM&CR tasks were last completed and when they are next due, ensuring that their Compliance Diary is up to date and resources have been made available to carry out these actions.  

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