FCA publishes further information and updates webpage on the extension of the SM&CR

Information on SM&CR extension for FCA solo-regulated firms

On 11 September 2019, the FCA published further information for FCA solo-regulated firms relating to the extension of the senior managers and certification regime (SM&CR).

It has updated its webpage on checklists for FCA solo-regulated firms to include additional information relating to Form K, which is the form that firms must submit to the FCA to notify it about which approved persons should be converted to a senior management function (SMF). The information is in the “Enhanced firms” section. The form can be found in Connect, under the “Approved persons” tab.

Form K must be submitted by 11.59 pm on 24 November 2019. A firm’s SMFs will appear on the financial services register on 9 December 2019. Therefore, on or shortly after 9 December 2019, the FCA advises firms to check the register to ensure that they have the correct SMFs.

The FCA has also updated its webpage on converting from the approved persons regime to the SM&CR to include a section with information for sole traders. Among other things, it states that sole traders will be limited scope firms and the only SMFs that will normally apply are SMF29 (Limited scope function) and SMF16 (Compliance oversight function).

It goes on to state that the certification regime does not apply to a sole trader as an individual, but may apply to their employees. This means that it does not apply to a sole trader with no employees. In addition, the conduct rules do not apply to a sole trader as an individual unless they hold an SMF. However, the conduct rules will apply to employees of sole traders (unless they perform one of the excluded ancillary roles).

The SM&CR will be extended to FCA solo-regulated firms on 9 December 2019.

FCA updates webpages in relation to SM&CR

 The FCA has updated its webpages for (i) checklists for solo-regulated firms implementing SM&CR (https://www.fca.org.uk/firms/senior-managers-certification-regime/solo-regulated-firms/checklists#core); additional text in relation to form K (which is used to notify the FCA which currently approved indivudals should be converted to a mapped SMF and form K must be submitted before 25th November 2019); and (ii) conversion from the approved persons regime to the SM&CR (https://www.fca.org.uk/firms/senior-managers-certification-regime/solo-regulated-firms/conversion-approved-persons-regime); a new section in relation to sole traders has been added which states that sole traders will be classified as a limited scope firm under the SM&CR.

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Claire Cummings

Claire practises financial services law with a focus on regulatory issues, cryptocurrencies and tokens, trading and brokerage documentation and advising both existing and start-up funds and fund managers.

If you would like to discuss any of the points we raise, please contact me or one of our other lawyers.

Phone: 0207 585 1406
Email: claire.cummings@cummingsfisher.com