Senior Managers and Certification Regime (SM&CR) Flashcards

Which employees are subject to the Certification Regime under SM&CR?

Answer: Employees in roles that could cause significant harm to customers or the firm, below Senior Manager level

The Certification Regime covers employees in roles that could cause significant harm to customers or the firm, sitting below the level of Senior Manager Functions.

How frequently must firms certify the fitness and propriety of employees under the Certification Regime?

Answer: At least annually

Firms must certify employees in certification functions as fit and proper at least annually, ensuring ongoing suitability is maintained.

Individual Conduct Rule 1 under SM&CR states that you must act with integrity. Which of the following best reflects this principle?

Answer: Being honest and straightforward in all dealings

Individual Conduct Rule 1 requires individuals to act with integrity, meaning being honest, open, and straightforward in all their professional dealings.

What is a Regulatory Reference under SM&CR?

Answer: A document disclosing employment history and fitness information about an individual moving between regulated firms

A Regulatory Reference is a mandatory document that regulated firms must request and provide when individuals move between regulated firms, covering employment history and any fitness concerns.

To which individuals do the FCA's Individual Conduct Rules apply under SM&CR?

Answer: All employees of FCA-regulated firms, except ancillary staff such as receptionists and cleaners

Conduct Rules apply to virtually all employees of FCA-regulated firms, with only ancillary staff who have no involvement in the firm's regulated activities excluded.

What is the primary distinction between the Senior Managers Regime and the Certification Regime?

Answer: Senior Manager Functions require prior FCA approval, while firms certify their own employees under the Certification Regime

The key distinction is that Senior Manager Functions require pre-approval from the FCA, whereas firms themselves are responsible for certifying their own employees under the Certification Regime.

What must a firm include in a Regulatory Reference provided for a former employee under SM&CR?

Answer: Any Conduct Rule breaches within the past six years and whether the person was dismissed or asked to resign for fitness reasons

Regulatory References must disclose Conduct Rule breaches in the past six years and whether the individual was dismissed or resigned under fitness concerns, preventing concealment of past misconduct.