Under SM&CR, Senior Management Functions (SMF) staff are likely to be afforded key worker status during the COVID-19 crisis. 20 March 2020 the FCA and the PRA published guidance for financial services firms on the identification of key workers. The principal privilege afforded key workers to date, is access to schools for children, if applicable and home care is unavailable. They ask that firms write to all identified individuals and include suggested wording that may act as evidence of their status. The regulators recognise that key worker designation is best performed by firms themselves and indicate that the Chief Executive Officer (SMF1) or equivalent will be held accountable for the identification. They suggest eligibility for key worker status will comprise two classes:
- Those workers who provide essential financial services to consumers; (likely)
- Those who ensure the continued functioning of markets
The guidance includes a list of essential roles that may be considered as fulfilling the above criteria:
- Senior management e.g. those captured under the SMR
- Online services and processing
- Running branches and the provision of essential customer services
- Payments processing and cash distribution services
- Facilitation of corporate and retail lending and debt repayment administration
- The processing of insurance claims and renewals
- The operation of trading venues and other critical elements of market infrastructure
- Performance of functions to comply with Regulations and meet client needs g. compliance, audit, risk management
- The provision of essential support to the above e.g. IT and finance
Although this list would seem to comprise close to the entire workforce of a financial firm, the guidance is to be interpreted narrowly and in light of wider Government rules. In practice, of the above list, designated key workers should only be those who are essential to the performance of their function and are unable to perform such function from home.
SMF staff will typically be considered critical to the running of their firm. In this rapidly-evolving situation, it is likely that they will see additional obligations and duties imposed.
The SM&CR is a complex regulation, with many different components, each of which can, and probably will, change over time. We can help you navigate this complicated regime, ensuring you, your business and your people can evidence compliance simply and effectively. Talk to us to find out more