Handover. Close up of a female hand passing the papers to the client

Everything you need to know about SM&CR handover materials

The creation and maintenance of handover materials is a key responsibility of senior managers under the Senior Managers and Certification Regime (the “SM&CR”).

If you are a senior manager, here’s what you need to know about the SM&CR and handover materials…

  1. Broadly, specific requirements to create and maintain handover materials applies to banks, insurance firms, and enhanced scope firms.[1]  However, handover materials are also referenced within the senior manager Conduct Rules and so have application to ALL senior managers.
  2. In-scope firms must take “all reasonable steps” to ensure that (a) candidates to become senior managers, (b) senior managers whose responsibilities are changing, and (c) anyone who has management responsibilities for anyone in (a) or (b) has, at commencement of the new role, all information that they could reasonably expect to have to perform that role effectively.[2]
  3. Handover materials are designed to help senior managers (and their line managers) get to grips with their new or revised responsibilities.[3]
  4. Information which should be made available within handover materials includes:
    1. details about unresolved or possible regulatory breaches; and
    2. details of any unresolved concerns expressed by any regulator.[4]
  5. Information contained within handover materials should (a) be practical and helpful and not just a record, (b) include an assessment of what issues should be prioritised, and (c) include judgement and opinion, and not just facts and figures.[5]
  6. Senior manager Conduct Rule 1 requires senior managers to ensure an orderly transition of responsibilities if another senior manager under their oversight ceases to perform a function.  The outgoing individual should prepare a comprehensive set of handover notes for their successor.  At a minimum, the notes should specify any matter that is ongoing which the successor would reasonably expect to be aware of.[6]
  7. A senior manager’s employer is also under an obligation to help ensure an orderly transition.[7]  To this end, outgoing senior managers should be required to contribute to the preparation of handover materials.[8]
  8. In-scope firms must maintain a policy about how it will comply with the requirement to ensure that handover materials are available to senior managers commencing a new role.[9]
  9. Firms must maintain “adequate records” of the steps taken to comply with the requirement to maintain handover materials.[10]

[1] SYSC 25.1.1R

[2] SYSC 25.9.4R

[3] SYSC 25.9.7G

[4] SYSC 25.9.6G

[5] SYSC 25.9.7G

[6] COCON 4.2.8G

[7] SYSC 25.9.8G(1)

[8] SYSC 25.9.8G(2) and SYSC 25.9.8G(3)

[9] SYSC 25.9.5R

[10] SYSC 25.9.5R