SM&CR compliant on-boarding processes have never been so important
Fit and Proper rules update
Are you aware of the updates to the Senior Managers and Certification Regime (SM&CR) impacting your organisation and how background checks and ongoing evaluations can ensure individuals meet the Fit and Proper criteria?
The SM&CR regulation has undergone significant updates in the last 3 months to its Fit and Proper rules, which are designed to enhance accountability and ensure that individuals in senior positions demonstrate appropriate conduct and capabilities.
The new standards require financial institutions to maintain operational integrity, including companies that have links to other global financial entities.
Show commitment to excellence and integrity by addressing these changes head on. We can help you to position yourselves as leaders in compliance and governance, ultimately benefiting your clients, stakeholders, and the broader financial community.
Strengthened regulatory compliance will enhance your organisation’s reputation and build trust with your clients and stakeholders.
Here are some of the key changes
- On March 30, 2023, the FCA, in conjunction with the Prudential Regulation Authority (PRA), launched a comprehensive review of SM&CR[1]. Key areas of review included the overall approach to fitness and propriety, the process for Senior Management Function (SMF) approvals, and the efficiency of the certification regime.
- The HM Treasury gathered insights on the legislative aspects of the regime to address industry concerns[2], such as the delays in SMF approvals and the proportionality of the regime compared to other global accountability frameworks.
- The FCA introduced new indicators for assessing the fitness and propriety of individuals[3], such as specific criteria for honesty, integrity, competence, capability, and financial soundness. Firms are expected to implement regular, thorough assessments and maintain detailed records of their processes.
What do these changes mean?
- Increased scrutiny: Requiring a higher level of scrutiny and ongoing assessment of senior managers and certified personnel.
- Continuous compliance: Implementation of robust processes for continuous monitoring and assessment of staff to ensure compliance.
- Individual accountability: Emphasis on individual accountability and senior managers to demonstrate integrity, competence, and financial soundness.
Conclusion
With vacancies falling on the quarter for the 24th consecutive period[4] and the competition for suitable candidates increasing, ensuring you have a seamless and compliant on-boarding process has never been so important.
Automate your SM&CR checks as much as possible to streamline your onboarding process, and work with a company that supplies its own inbuilt proprietary data, amongst other data suppliers, to speed up your time to hire and support you with your annual re-checks.
Reduce the pain for your Onboarding Managers and Compliance Teams to free up their time for other tasks by completing your Right to Work and SM&CR checks via Experian.
How can we help?
As a regulated FCA company, we appreciate the processes you must go through to comply with SM&CR regulations. Our swift process encompasses an automated proof of address verification option (no need for your candidate to upload utility bills, etc), along with certified IDVT solution to help with your Criminal Record Check Digital Identity and Right to Work Checks.
Benefits of using Experian Candidate Verifier and Right to Work solution:
- Adheres to the latest SM&CR updates, mitigating the risk of regulatory penalties and enhances operational stability.
- Certified to the Government Trust Digital Identity Framework and both integrate via an open API into your ATS or back-office solutions. Our technology will allow you to choose if you want to do face to face, or remote checks.
- Speed up your time to hire and improve your candidates/employees experience by utilising Experian’s Candidate Verifier and RTW solutions.
- Increase client trust and confidence by upholding the FCA/PRA rigorous standards of conduct regimes and governance.
- Streamline your processes for compliance to improve operational efficiency and reduce risk.
Further reading
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[1] Review of the Senior Managers and Certification Regime (SM&CR), The Financial Conduct Authority
[2] Senior Managers & Certification Regime: a Call for Evidence, GOV.UK
[3] Senior Managers and Certification Regime, The Financial Conduct Authority
[4] Vacancies and jobs in the UK: July 2024, Office for National Statistics