On 9 December 2019, the Senior Managers and Certification Regime (SMCR) will be extended to all financial services businesses that are regulated by the Financial Conduct Authority (FCA).
The extension increases the scope of regulations that were introduced in 2016 for certain banking firms and building societies. Where it once covered about 400 firms, it will now apply to around 47,000 organisations.
The SMCR aims to strengthen the integrity of the financial services market after a period of intense scrutiny by improving the sense of personal responsibility among those who work in the sector, and by making sure firms clearly understand and can evidence who does what in their organisation, and how decisions have been made.
The SMCR will require firms to deal with large amounts of new documentation, as well as update systems and processes. This will impact HR teams and people managers in particular because the changes will affect how they recruit, screen, manage and develop a significant proportion of their employees. They will need a far more accurate understanding of managers’ and employees’ responsibilities, will need to ensure that staff have the right skills and attributes to conduct their role, and must make sure their processes and digital systems can support this.
Not only that, but complying with the SMCR will also require a wider push towards more personal and collective accountability in the culture of your organisation. Its very nature means senior leaders, HR teams and individuals alike will come to understand much more about their business: who makes decisions, how they are made, who delegates what to whom, and whether you have the best possible person in each role.