Executive Summary

We welcome this Phase 1 of the FCA’s consultation, which we think successfully builds on DP1/23:  Review of the Senior Managers and Certification Regime in assessing the extent to which the regime has met its objectives, as well as considering how it could be more effective and efficient.

Subject to our comments elsewhere in this response (most of which are matters of note/technical in  nature rather than fundamental issues) we are supportive of the proposed Phase 1 changes which we agree will: 

• Improve the efficiency of the 12-week rule,
• Streamline the Senior Management Function (SMF) approval process, including planning potential changes to processes and communications,
• Increase the validity period of criminal record checks for SMF applications
• Allow more time to report updates to Statements of Responsibilities (SoRs),
• Remove overlap in certification roles and provide guidance on annual certification to help firms streamline the process, 
• Allow more time for firms to update specified Directory information, and
• Provide guidance in key areas

We also look forward with anticipation to the FCA’s planned Phase 2 work, as we believe that this has the potential to deliver an even more effective regime and drive more extensive efficiencies through considering:

• Reducing the number of SMF approvals, by removing SMF roles or reducing pre-approvals,
• Providing more flexibility to appoint interim SMFs before seeking approval by expanding the use of the 12-week rule,
• Further streamlining the SMF assessment process, 
• Reducing further the frequency of submission of SoRs, the number of PRs, and simplifying Management Responsibilities Maps, 
• Designing a streamlined regime to replace certification,
• Removing the Directory and exploring with industry alternative ways to ensure consumers have other sources of information they require, and 
• Streamlining Conduct Rule breach reporting, building on what is being done as part of Phase 1.

Read the full response