C5 - D Flashcards
Senior Managers and Certification Regime (SM&CR)
applies to both insurers and
brokers/intermediaries.
It focuses on the most senior individuals
in firms who hold key roles or have overall responsibility for whole areas of relevant firms
(SM&CR) - firms are required to do what?
- ensure each senior manager has a statement of responsibilities, setting out the areas for which they are personally accountable
- produce a ‘firm responsibilities map’ that knits these together
- ensure that all senior managers are pre-approved by the regulators before carrying out their roles.
Bank of England and Financial
Services Act 2016.
The Government also introduced a ‘duty of responsibility’, which means senior managers are required to take the steps that it is reasonable for a person in that position to take, to prevent a regulatory breach from occurring
SM&CR has three parts:
- Senior Managers Regime.
- Certification Regime.
- Rules of Conduct.
What is the purpose of the Senior Managers Regime?
It applies to persons performing senior roles in a firm, known as senior management functions (SMFs)
Who must submit an application to the regulators for approval under the Senior Managers Regime?
Firms planning a new senior manager appointment or a material change in role for currently approved individuals
What are senior management functions (SMFs)?
Specified roles defined by the PRA and FCA for individuals in senior management positions
What is a ‘Head of key business area’ in the context of the Senior Managers Regime?
An individual managing a business area so large it could jeopardise the firm’s safety and soundness
Define ‘Group entity senior manager’.
Individuals employed in another group entity or parent company who can exercise significant influence over the firm’s affairs
What is a ‘Significant responsibility function’?
Senior executives responsible for functions or business areas where key risks exist, but not categorised under a significant management function
List five executive senior management functions prescribed by the PRA.
- Chief executive function
- Chief finance function
- Chief risk function
- Head of internal audit
- Head of key business area
List three non-executive senior management functions prescribed by the PRA.
- Chairman
- Chair of the risk committee
- Senior independent director
What should be included in a statement of responsibilities for each senior manager?
Responsibilities in managing the firm’s affairs, complemented by CV, personal development plan, job description, organisation chart, and responsibilities map
What does a responsibilities map set out?
The firm’s management and governance arrangements, including reporting lines and responsibilities
True or False: The FCA distinguishes between large and small firms in the context of responsibilities maps.
True
Fill in the blank: The _______ is a document that outlines the management and governance arrangements of a firm.
responsibilities map
What is the role of the Money Laundering Reporting Officer in the context of the Senior Managers Regime?
It is categorized as a significant responsibility senior manager
The PRA’s list of SMFs:
Executive
* Executive director.
* Significant responsibility senior manager.
* Money laundering reporting officer or nominated officer.
* Compliance oversight.
Non-executive
* Non-executive director.
* Chairman of the nominations committee
