Funeral planning companies seeking authorisation will need to embrace the regulator’s SMCR programme.
The FCA replaced the old Approved Persons Regime (APER) following the difficulties with certain financial institutions. The new focus set out under the Senior Managers & Certification Regime (SMCR) is the responsibility placed upon individual directors and managers alike.
The SMCR programme was first introduced within the major banks back in 2016 and has now been widened to all regulated activities.
At its heart the Senior Managers & Certification Regime seeks to establish sound corporate governance and personal responsibility. Staff at all levels become accountable for their actions. Under the FCA’s programme most funeral planning organisations will fall under the auspices of ‘core regime’ firms. In other words, the majority of businesses within this sector will be core firms firm.
The programme is constructed from three pillars:
The Senior Managers Regime
This is reserved for the senior managers who undertake important or key functions. Noted as SMF – Senior Management Function. These staff must be approved by the regulator. Statements of responsibility are needed (SoR). In addition, the regulator details prescribed responsibilities which must be directly allocated.
There must be no breaches of regulation within these categories.
Responsibility maps are necessitated are needed for enhanced firms.
The Certification Regime
Within the funeral planning company employees who are not senior managers but whose activities might cause harm to the company or customers if they not properly controlled or supervised will be classed as certified employees.
In addition, the regulator requires under the certification regime annual re-assessment. This requires the employer or firm to re-certify the probity / competence / suitability of the employee in question to fulfil their task.
Overall responsibility of the certification regime must be directed to a senior staff member, who is accountable for the upkeep of this arrangement
The regulators new conduct rules will apply to the funeral planning businesses. Firstly, there are the first tier individual conduct rules. These are general rules that apply to most staff.
The second tier Senior Managers Conduct Rules) apply to those senior staff members who hold the SMF roles.
The funeral planning organisation will need to adequately train its staff to ensure they understand and adhere to conduct rules. A senior manager is personally liable for ensuring full adherence to this programme.
Disciplinary issues should be reported via agreed channels to the regulator. This is detailed as being within 7 days for senior managers and annually for other staff.
In addition, senior managers and staff falling under the certification regime need training and must agree to the conduct rules.
For further information and to book your Senior Managers & Certification Regime (SMCR) survey please contact: Mo Arshad LLB LLM at Thamer James Ltd. Email: [email protected]
Mo has a specialism in FCA regulation and has worked with a broad range of financial services organisations including the funeral planning sector. He has provided advice across the regulatory spectrum including the implementation of the Senior Managers and Certification regime, General Data Protection Regulation as well as guiding firms through the FCA regulatory approval process and associated notifications.
Mo holds a Law Degree, a Master’s in Law as well as the respected Diploma in Governance, Risk and Compliance from the International Compliance Association.