Conduct Rules 1

Your guide to the conduct rules – Part 1


In this first of 13 articles we look at the scope of the conduct rules, which form part of the Senior Managers and Certification Regime (the “SM&CR”) – specifically, we will look at the question of which staff members are in-scope and which are out-of-scope for the purposes of the conduct rules.

Who is in-scope?

The conduct rules apply to:

  1. senior managers,
  2. anyone performing the role of a senior manager (but who has not been approved by the FCA),
  3. anyone who would be performing the role of a senior manager except for making use of the ‘12-week emergency replacement’ rule described in SUP 10C.3.13R,
  4. certification employees,
  5. anyone who would be acting as a certification employee except for the operation of ‘4-week emergency replacement’ rule described in SYSC 27.5.1R or the ‘temporary UK role’ exception described under SYSC 27.5.3R,
  6. any board director of a UK SMCR firm, and
  7. any other employee of a UK SMCR firm who does not qualify as “ancillary staff”.[1]

Going forward, we will refer to this set of individual as “conduct rules staff”.

Who is out-of-scope?

The only staff members who are out-of-scope for the purposes of the conduct rules are those who satisfy the definition of “ancillary staff”.  This is an exhaustive list and includes:

  1. receptionists,
  2. switchboard operators,
  3. post room staff,
  4. reprographics/print room staff,
  5. property/facilities management,
  6. events management,
  7. security guards,
  8. invoice processing,
  9. audio visual technicians,
  10. vending machine staff,
  11. medical staff,
  12. archive records management,
  13. drivers,
  14. corporate social responsibility staff,
  15. data controllers and data processors – but only to the extent that these individuals are NOT required to exercise “a significant amount of discretion or judgment”,
  16. cleaners,
  17. catering staff,
  18. personal assistants or secretaries,
  19. information technology support (i.e. helpdesk), and
  20. human resources administrators/processors.[2]

In addition, note that the conduct rules do not apply to:

  1. appointed representatives,[3] or
  2. sole traders (unless the sole trader is also a senior manager).  However, in a seemingly strange quirk, note that the conduct rules DO apply to employees of sole traders (unless those employee also qualify as “ancillary staff”).

In our next article, we will move on to look at the TYPES of conduct to which the conduct rules apply.

Stay tuned!

[1] COCON 1.1.2R

[2] COCON 1.1.2R

[3] COCON 1.1.8AR