On a very hot and sunny Tuesday in June, I was delighted to be invited to talk to Investment Association members on the topic of SM&CR. Joining a line-up that included David Blunt, Head of Conduct Specialists at the FCA, Angela Hayes from TLT, Natasha Cork from HSBC Asset Management and Sarah Thwaites, Senior Policy Adviser at The IA. The afternoon was given over to discussing regulatory expectations around SM&CR and practical experience of the dual regulated regime in Banking.
On Thursday 4th June, 2020, Julie Pardy, Director of Regulation & Market Engagement (Worksmart) joined the London Institute of Banking and Finance (LIBF) to discuss the implementation of SM&CR for solo regulated firms, particularly the challenges and priorities for those teams responsible for implementation.
The world of work has changed beyond recognition for most of us over the last few months. And when PIMFA approached us here at Worksmart to ask whether we wanted to be part of their first ever 2 day Virtual Conference and Exhibition, with plans for an exclusively digital learning experience to cover a multitude of issues to help firms thrive in these extraordinary times, I thought... what have we got to lose...
Flexibility is key
Life is very different now from what it was just a few weeks ago. Businesses and their staff are facing great uncertainty, however one thing that is certain, is that as customers come to terms with the new normal, there will be rising levels of concern with regards to the provision of products and services from financial services providers. This will give rise to a range of different questions and potential complaints. The UK are facing this challenge at a time of heightened emotions on all sides, where everyone is potentially vulnerable, not just customers, but also your staff and your business.
I’ve heard it said before… “The FCA have got bigger fish to fry, they aren’t going to be looking into how our business operates. There are only 400 of us and we are not a fixed portfolio firm with a named supervisor. We think they have probably forgotten who we are since they authorised us…..”
The FCA has recently published its business plan for 2020/21, setting out its strategic focus for the next three years.
As you might expect in the current climate, it’s shorter than usual, with a focus on potential market disruption caused by COVID-19, but still manages to convey key areas of concern.
Pandemic, Senior Manager Accountabilities and flexibility are not really a selection of words that anyone would have envisioned being joined together only a few months ago...
CONCON 4.2 SC1: "You must take reasonable steps to ensure that the business of the firm for which you are responsible is controlled effectively"
"You can delegate authority but you can not delegate responsibility"
Former U.S. Senator Byron Dorgan
KNOWLEDGE – “Facts, information and skills acquired through experience or education. The theoretical or practical understanding of a subject”
COMPETENCE - “The ability to do something successfully or efficiently”
Appropriate and effective competence frameworks have been a regulatory requirement in Financial Services since the early 1990’s. The concept of T&C was introduced back in the early 90’s by LAUTRO and then refined by the PIA and FSA over the late 1990’s and 2000’s. More recently however, T&C has taken a bit of back seat to more recent regulation, such as MIFID II Knowledge and Competence requirements, the Insurance Distribution Directive and the Senior Managers & Certification Regime. However, these newer regimes all have the same underlying theme, and that is to ensure that organisations have structured and effective processes so that employees have the knowledge and competence necessary for them to fulfil their roles effectively. Therefore, whilst not necessarily grabbing the headlines, the concept of structured and effective T&C regimes remain at the forefront of our regulator’s approach to managing employee competence.
This series of three blogs is designed to help you review the fitness of your T&C or wider competence management arrangements. We aim to challenge you to consider whether your current approach is fit for purpose.