CEO Today Magazine August 2019 Edition

www.ceotodaymagazine.com 28 SPECIAL FEATURE CEOs Need to be Aware Come December 2019, the Financial Conduct Authority (FCA) will extend the Senior Manager & Certification Regime (SMCR) to 47,000 solo-regulated financial institutions. The scope of the SMCR is also expanding to include non-financial conduct. Clearly, these measures are geared towards minimising risk and enhancing the resilience of the financial services sector and indeed of UK Plc. Memories are still fresh about the scale of government support during the banking crisis, and other more recent problems that have impacted customers of financial services organisations. Government, regulators and the wider industry are wary of a repeat of these incidents, and the level of taxpayer support needed to address them. It is within this context that SMCR has evolved, with the aim of enforcing individual accountability for senior executives and driving a cultural shift in financial institutions towards a more proactive and positive attitude towards governance. Transparency and accountability are now the name of the game. SMCR is the keystone of UK regulation It may, however, not have hit home in the C-suite yet that due to the wide scope of this regime, the vast majority of regulations that affect financial institutions ultimately lead back to SMCR. Fundamentally, a breach in one set of regulations could imply a breach in SMCR, resulting in close scrutiny at the very least, and potentially much worse besides. Regulatory bodies are aligning themselves with each other to take a joined-up view of policy and action. The challenge for many institutions, their CEOs and senior executives is that the plethora of new regulations and accounting standards – MiFID II, Operational Resilience, SS3/18, IFRS 9, for example – that will fall within the remit of SMCR shows no sign of abating. Moreover, the tone and scope of many of these regulations are changing, as regulators look at the systems All Regulations Lead to the Senior Manager & Certification Regime By Henry Umney, CEO of ClusterSeven