If your firm is required to maintain a management responsibilities map, here’s what you need to know…
Broadly, the requirement to create and maintain a management responsibilities map applies to banks, insurance firms, and enhanced scope firms.[1]
In-scope firms must AT ALL TIMES, have a comprehensive and up-to-date management responsibilities map.[2]
A management responsibilities map is designed to help the firm and the FCA satisfy themselves that the firm has a clear organisational structure and to help the FCA to identify who is (or will be) accountable for a particular issue.[3]
Management responsibilities maps must include:
- details of reporting lines and lines of responsibility[4],
- reasonable details about the persons who are part of the chain of responsibilities (and their responsibilities),[5]
- all the names of the firm’s approved persons, governing body, senior management and senior personnel (as well as summary[6] details of the responsibilities which they hold)[7],
- all responsibilities described in any current statement of responsibilities[8],
- details of the management and governance arrangements relating to Prescribed Responsibilities (including the identity of the persons to whom those functions are allocated)[9]. This is not relevant to EEA SMCR firms[10],
- the reasons why Prescribed Responsibilities have been allocated to more than one person jointly or divided between different persons (if relevant),
- details about the allocation of responsibilities under SFM18 (other overall responsibility) and SMF 22 (other local responsibility),
- matters reserved to the governing body,
- details of how the firm’s management and governance arrangements fit together with its group,
- details of the extent to which the firm’s management and governance arrangements are provided by, or shared with, other members of its group or others.
A management responsibilities map must show clearly how any responsibilities are shared or divided between different persons.[11]
If senior management functions have been allocated to more than one person (or are performed by more than one person), a management responsibilities map must give details of how those responsibilities are performed by the individuals in question.[12]
Enhanced scope firms need only include management and governance arrangements to the extent that they relate to regulated activities[13] (but must provide sufficient information about non-regulated activities to show how the regulated activities fit with the firm’s management and governance arrangements as a whole).[14]
Support functions that should be included in any management responsibilities map include human resources, IT, compliance and legal.[15]
Management responsibilities maps should be consistent with Statements of Responsibilities.[16] Both should make it simple to see how responsibilities fit into the overall system of management and governance of a firm.[17]
Management responsibilities maps should demonstrate that there are no gaps in the allocation of responsibilities among management.[18]
Management responsibilities maps should include a checklist confirming that all Prescribed Responsibilities have been allocated or, if not, why not.[19]
A management responsibilities map must be a single document[20] (in the sense that it should be self-contained)[21]. However, this doesn’t mean that it needs to be a single sheet of paper – it can be made up of a folder (which can be electronic) with several files or items in it.[22]
The FCA expects that the management responsibilities map of a small and non-complex firm is likely to be simple and short. It may be no more than a single sheet of paper.[23]
An in-scope overseas branch should draft its management responsibilities map as if the rest of the firm outside of the UK branch were a separate company in its group.[24]
Firms should consider past versions of their management responsibilities maps as an important part of their records and as an important resource for the FCA in supervising the firm.[25]
Firms must maintain past versions of a management responsibilities map for 6 years (in the case of large non-Solvency II insurers) and for 10 years (in all other cases) from the date on which it was superseded by a more up-to-date version.[26]
Firms must be prepared to provide each version of their management responsibilities maps to the FCA on request.[27]
[1] SYSC 25.1.1R
[2] SYSC 25.2.1R
[3] SYSC 25.1.6G
[4] SYSC 25.2.1R and SYSC 25.2.3R
[5] SYSC 25.2.1R
[6] SYSC 25.4.5G
[7] SYSC 25.2.3R
[8] SYSC 25.2.3R
[9] SYSC 25.2.3R
[10] SYSC 25.6.4G
[11] SYSC 25.2.2R
[12] SYSC 25.4.10G
[13] SYSC 25.3.1R
[14] SYSC 25.3.2R
[15] SYSC 25.3.3G
[16] SYSC 25.4.1G
[17] SYSC 25.4.2G
[18] SYSC 25.4.4G
[19] SYSC 25.4.9G
[20] SYSC 2.5.1R
[21] SYSC 25.5.2G(3)
[22] SYSC 25.5.2G
[23] SYSC 25.4.14G
[24] SYSC 25.4.13G
[25] SYSC 25.8.1G
[26] SYSC 25.8.3R
[27] SYSC 25.8.3R
