First launched in 2016 and then gradually extended to virtually all regulated firms, the SMCR framework was introduced to drive accountability, transparency, and ethical behaviour within the financial services. The SMCR holds Senior Managers and key personnel in financial firms accountable for their acFons, and the acFons of other individuals within their firm.
While SMCR is part of the regulatory framework, the FCA offer suggestions of how firms may undertake the responsibilities that the SMCR sets out. This means there aren’t clearly defined rules but rather “aims” that the FCA deem important as part of the regime.
For example, firms should aim to clearly define and assign responsibilities to senior managers and certify individuals in roles that could pose a significant risk to the business, stakeholders or investors. Moreover, the framework encourages firms to continually assess and confirm that individuals in certain roles are suitable and competent. Screening senior managers, particularly those under SMCR, helps mitigate risk, improve transparency for investors and shareholders, and enhances firms’ readiness to be responsible as part of any
DDQ requirements.
Key aims to consider under SMCR regulation:
• Enhanced individual accountability
• Improved culture and governance
• Reduced risk of misconduct and failure in the industry
• Access to a clear framework for identifying and addressing risks related to actions and behaviour
• Protection from related regulatory risk
Screening your SMCR individuals
The FCA suggest that screening individuals in Senior Manager roles is advised on an annual basis as a minimum. In order to effectively navigate these complexities, many organisations seek specialist expertise to streamline the screening process, to ensure compliance records are met and maintained accurately. Screening for Senior Manager roles is a meticulous process that
demands a deep understanding of SMCR.
At FeMan Consulting, we provide specialist outsourced background screening. With 18+ years of working alongside FCA regulated businesses, we can help assess the propriety of your employees whilst complying with FCA recommendations and regulations. Undertaken in-house, screening can be onerous and time consuming. We can ease this burden.