The City regulator said that as firms have adapted to the impact of Covid-19 over the past few months, it expects the application of the Senior Managers and Certification Regime (SM&CR) rules to return to normal.
Senior managers are responsible for risks in their areas of responsibility and should consider where the current situation might lead to emerging risks and how it affects existing risks, along with the controls used to manage them.
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The Financial Conduct Authority (FCA) said some of its previously available provisions will end on 7 January 2021 and that the relevant modifications by consent will end after 30 April 2021.
The regulator added that that its previous provision of expecting a firm needing to make temporary arrangements in direct response to the pandemic not to have to submit statements of responsibility if certain conditions were met, will end on 7 January 2021.
As most firms have now adapted to the new ways of working, the FCA now expects firms to apply the notification requirements as normal and submit a Form J when significant changes are made to statement of responsibilities.
A form J is a notification of significant changes in responsibilities of a person performing a senior management function.
“We continue to expect that temporary arrangements carried out under the previous version of this statement to be clearly documented internally, so that everyone understands who is responsible for what,” the FCA said in a blog on its website.
“This should be available if we request it – now or in the future.”
The FCA previously issued a modification by consent, where firms must clearly document the responsibilities of someone standing in for a senior manager, to a 12-week rule to support firms using temporary arrangements during the crisis.
The regulator said this is still available, but a firm cannot consent to the modification after 30 April 2021 and all modifications consented to before then will come to an end on that date.
Meanwhile, the FCA’s guidance on furloughed senior managers has not undergone much change.
There may be cases where a company decides to furlough senior managers, for example, if they are unable to work due to illness or caring for someone else.
The regulator said that responsibilities must be allocated to another senior manager or if the firm is using the 12-week rule, the replacement does not need to be a senior manager.
Unless a furloughed senior manager is permanently leaving their post, the manager will retain their approval during their absence and will not need to be re-approved by the FCA when they return.
The regulator said the firm is still responsible for ensuring the senior manager is fit and proper.