The SM&CR –
accountability, control, compliance

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The Senior Managers and Certification Regime (SM&CR) for banks and PRA-designated firms came into force on 7 March 2016 and some of our clients have already been required to complete and register their SMR/SMF and governance structures and maps.


This first stage is, however, just the beginning.

It’s simply not enough to create your SMFs, assign responsibilities and produce your map, then just hope for the best.

Firms must create monitoring assessment and management processes to ensure that their SM&CR responsibilities are fully delivered to the regulators’ satisfaction. They must also be able to record and evidence this and ensure that those in SMFs – the senior management team – have full oversight of the areas of responsibility they have been assigned and the forensic analytical tools and MI – that they have taken the ‘reasonable steps’ required to ensure compliance.

In October 2015, the Treasury announced that the SM&CR would be extended to cover the entire financial services sector, replacing the current Approved Persons Regime. This extension is expected to take place in 2018.

“It’s simply not enough to create your SMFs, assign responsibilities and produce your map, then just hope for the best.”

Why your firm needs to take action

This event may seem to be some time away, but the point is that it will be applicable to all firms that currently have registered Approved Persons and will require the certification by the firm of most of these individuals. This will significantly increase the assessment of competence, fitness and propriety that the firm is expected to maintain and record. Firms will also be required to identify, register and map the senior staff that hold Senior Management Functions (SMFs).

As a minimum, firms will first be required to:

  • Produce and maintain auditable, date-locked versions of the SMR map.
  • Acquire initial attestation / sign off from all SMFs on this map.
  • Acquire and record sign-off for changes in that map when they occur.
  • Ensure that every individual holding an SMF is competent to do so.
  • Register and / or grandfather all their SMF holders and submit governance and SMR map structures to the regulators.

Additionally, firms will need to:

  • Assure themselves that the responsibilities assigned to SMFs are being discharged and monitored satisfactorily.
  • Give SMFs appropriate oversight of those functions or individuals that fall under their authority – by creating assessment benchmarking and monitoring hierarchies of supervision specifically for SMR.
  • Benchmark and assess competence and manage certification process and Fit and Proper assessment for all certified staff.
  • Identify risks – as they arise – associated with SMR responsibilities, competence and conduct and mitigate them promptly.
  • Provide the means for forensic analysis by senior management of the key responsibilities, through appropriate monitoring, benchmarking and MI.
  • Identify ‘reasonable steps’ for each SMF role and ensure that these steps are being taken adequately.
  • Assess and monitor performance of key responsibilities in certified roles through a blend of assessment, benchmarking and RAG monitoring of reasonable steps, competencies, KPI’s, and conduct risk indicators.
  • Embed, train, benchmark and assess Conduct Rules across the firm.
  • Create training plans – log and verify CPD – test and assess outcomes.
  • Produce graphic ‘tree’ maps / reports of current oversight and governance structures.

The next generation of HRComply

HRComplySoft is a complete solution for managing your firm’s SM&CR needs – along with broader T&C, Conduct and Performance.

Our system simplifies and automates all of these procedures giving you the monitoring, assessment and appropriate oversight tools required to ensure that these areas of governance, conduct, competence and responsibility are being delivered appropriately.

We have developed new functionality, enhancing HRComplySoft through the existing modular structure to ensure that firms can undertake all of this easily, cost effectively and through ONE SINGLE PLATFORM and subscription. We don’t require you to take separate subscriptions for each area of T&C, SMR and Conduct Management, or every relevant regulatory framework.


Let us show you why you need this solution – through an online or on-site demo. Contact Neil Herbert today.