Yesterday, the FCA published its “Regulation round-up” for September 2020 – touching upon the SM&CR on a couple of fronts.
Conduct Rules breach reporting
Firms are reminded that they must submit form REP008 via Gabriel in order to report disciplinary action taken against all non-Senior Manager members of staff for breach of the Conduct Rules.
It’s worth noting that the current reporting requirement only applies to individuals who were actually subject to the Conduct Rules at the time the breach occurred. This includes Senior Managers, Certification Staff and Directors of UK SM&CR firms who are not Senior Managers. Of course, disciplinary action taken against Senior Managers should be reported on Form D or Form C (depending on whether or not the Senior Manager continues to perform the Senior Management Function in question) rather than Form REP008. The Conduct Rules will only apply to all other staff from 31 March 2021 so they won’t be included (yet) either.
For all firms (except limited permission consumer credit firms) the first REP008 is due on 2 November 2020 for the period 9 December 2019 to 31 August 2020 – even if just to make a nil return.
The FCA also takes the opportunity to remind Senior Managers of their responsibilities to put in place appropriate arrangements to identify their firm’s exposures to LIBOR and to transition away from LIBOR by the end of 2021. In doing so, they must ensure that they do not harm “the viability of their business, their clients or the orderliness of markets”. So, no great ask there then. Helpfully, though, the FCA has also published a new webpage to support firms in their efforts to do just that.
So, even through Coronavirus, regulatory change rumbles on. Decisions have to be taken. Stakeholders will inevitably be impacted. The SM&CR is the lens through which the FCA increasingly views the efforts of all firms (and their staff). Ultimately, it’s designed to engender cultural change. But as you drive through regulatory change don’t forget the building blocks of baseline SM&CR compliance – robust process, audit trails, access to information. The FCA is watching…