FCA consultation on extending Senior Manager and Certification Regime - PwC comments

Jul 26, 2017

Commenting on the FCA's consultation to extend the Senior Manager and Certification Regime, published today, Grant Lee, financial services risk and regulation partner at PwC said:

"Today's proposals will impact a diverse and extensive range of firms.  We are glad to see that the FCA has taken a proportionate approach with its limited, core and enhanced regimes, as ensuring the best outcomes requires the FCA to recognise the diversity of firms. The FCA will, however, need to consider how best to manage its interactions with such a varied group of firms.

"Our experience of the banking and insurance regimes has shown that firms need to think about the regimes in conjunction with wider governance structures and policies.  Firms need to engage now - some banks failed to engage early with the proposals and found the subsequent process more challenging than they expected.  

"Firms are already flat-out tackling other regulatory issues such as MiFID II, the Insurance Distribution Directive, PRIIPs and GDPR, let alone managing the uncertainty of Brexit so the FCA must be pragmatic in its approach, expectations and deadlines. 

"Asset and wealth management firms were already on notice to better consider their clients' best interests and today's new prescribed responsibility for the Chair of an authorised fund manager seems to encompass a wider scope including oversight of the independence of directors.  Firms will be keen to understand how to fulfil the FCA's expectations.

"The FCA must also be cognisant of the fact that many asset and wealth managers have EU or global footprints, and striking a balance between driving accountability in those who are responsible, without unduly affecting head-office staff is important.

"Grandfathering and transitional provisions are really important.  The FCA itself will be experiencing an uptick in authorisations and permissions activity - due to MiFID II, but also Brexit, so it is important that the regulator feels able to manage the volume of activity that today's proposals could create.

"Firms shouldn't underestimate the implications of this initiative on their people. Discussing the nature, scope and accountability of roles in an organisation is highly emotive, so communicating with staff both immediately, and throughout implementation exercises is vital."


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