Chapter 10 part 3 Flashcards
What does SMR stand for?
Senior Manager Regime
Who does the SMR apply to?
applies to persons performing the most senior roles in a firm – ‘senior managers’.
What does SMFs stand for?
senior management functions
Who makes the senior management functions rules?
FCA and PRA
Any firms planning a new senior manager appointment, or a material change in role for currently approved individuals, must do what?
Prepare and submit an application to the regulators for approval.
The SMR has a broade scope of new roles which includes?
• Head of key business area
• Group entity senior managers
• Significant responsibility function – senior executives
The SMFs are prescribed by the PRA and the FCA, and for each regulatory body are split into what two catagories?
Executive
Non-Executive
What does SoR stand for?
Statement of Responsibility
Who should a Statement of Responsibilities (SoR) be prepared for?
each senior manager
What should an SoR include?
appropriate Prescribed Responsibilities as set out by the FCA
What should an SoR be complimented by?
the individual’s CV,
personal development plan,
job description,
organisation chart showing reporting lines and
the firm’s responsibilities map
What should the responsibilities map set out?
the firm’s management and governance arrangements,
including reporting lines and responsibilities
What does CR stand for?
Certification Regime
Who does the CR apply to?
individuals who are not carrying out SMFs, but whose roles have been deemed capable of causing significant harm to the firm or its
customers by the regulators.
How often does a firm need to formallyy certify a CR?
At least annually
These ‘significant harm function’ roles are also specified by the regulators - are the subject to prior regulatory approval?
NO
Who is responsible for the Certification Regime within a firm?
An allocated senior manager
Is a SMR apllicable to roles overseas?
Yes when they have an impact of the firms UK Strategy
Are CRs applicable to overseas?
CR generally only applies to UK-based employees (with the exception of those categorised
as ‘material risk takers’ or those dealing with UK clients).
There are two tiers of Conduct Rules - what are they?
- Individual Conduct Rules – rules which apply to most employees within a firm.
- Senior Manager Conduct Rules – rules which only apply to SMs.
What does FIT stand for?
The Fit and Proper test
An individual in senior management or a certified position under SM&CR must be (and remain) ‘fit and proper’ for their function. This means that they must be tested with regard to their what?
• honesty, integrity and reputation;
• competence and capability; and
• financial soundness
Who is the onus on to determine whether an individual is fit and proper for the role?
The firm
What will a firm to do determine if someone is fit and proper?
credit checks
references for the last 6 years
while the regulator also carries out its own monitoring in these areas.
