Treasury and regulators consult on SMCR

Treasury has published a call for evidence and PRA and FCA have published a discussion paper on the effectiveness of the SMCR. The papers, which result from the announcement of the Edinburgh Reform package, seek views on whether the regime has delivered what it intended, and whether any improvements or changes are necessary.  The discussion results in part from the lengthy waits firms faced for approval, which the regulators say they have now addressed, but also looks to establish whether the UK model is appropriate for the UK’s international competitiveness.

PRA and FCA are keen to understand if there are improvements which would improve efficiency, and whether any elements of the process are not valuable. Questions include:

  • whether the SMCR has made it easier to hold individuals to account;
  • whether the SMCR has improved safety and soundness and conduct within firms;
  • how helpful the fitness and propriety requirements are;
  • what can be done so that appropriate individuals are not deterred from taking up senor manager roles;
  • the extent to which the SMCR has made it easier for firms to discipline misconduct;
  • could individual director responsibility better complement the collective responsibilities of boards and decision making committees;
  • is the regulatory approach to enforcement right;
  • whether the scope of the regime is appropriate and proportionately applied;
  • how the approval process could be improved;
  • to what extent the process for getting criminal records and submitting these to the regulators supports the regime;
  • how helpful the 12 week rule is
  • whether the SMFs and PRs are appropriate;
  • the extent to which the Duty of Responsibility supports personal accountability and better conduct of senior managers;
  • the effectiveness of the Certification regime;
  • the usefulness of regulatory references; and
  • whether the Conduct Rules are effective in promoting good conduct across all levels of the firm.

Treasury asks for comments by 29 May, and the PRA and FCA by 1 June.

Emma Radmore