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SENIOR MANAGERS AND CERTIFICATION REGIME

OPERATIONAL COMPLIANCE

19TH MARCH 2019

16TH APRIL 2019

LONDON

 
 
 

ABOUT THE SENIOR MANAGERS AND CERTIFICATION REGIME

The Senior Managers and Certification Regime (SMCR) replaces the Approved Persons Regime in the United Kingdom (UK). According to the UK's Financial Conduct Authority (FCA) the SMCR aims to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence. In order to achieve these objectives the SMCR seeks to encourage a culture of staff at all levels taking personal responsibility for their actions, and making sure that firms and staff clearly understand and can demonstrate where responsibility lies.

The key features of the SMCR are: (1) the Senior Managers Regime; (2) the Certification Regime; and (3) the Conduct Rules.

In order to tailor the framework to reflect different risks, impact and complexity of firms, the FCA will categorise firms depending on size and function into: (1) Core Firms; (2) Enhanced Firms; and (3) Limited Scope Firms.

The SMCR is set to be extended to cover all other firms authorised under the Financial Services and Markets Act 2000 (FSMA) on 9th December 2019. Consequently, it is imperative that firms begin preparing for the transition now as some firms may require highly extensive reviews and changes in order to become SMCR operationally compliant.


THE TRAINING PROGRAMME

The one-day SMCR Operational Compliance training course has been specifically designed to provide attendees with highly comprehensive training in all the most relevant aspects of the SMCR. With such extensive and potentially onerous requirements under the SMCR, the training course will provide attendees with all the knowledge and training they need to fully understand how the SMCR requirements will apply to themselves and their firms. The first three sessions during the day provide extensive coverage of the Senior Managers Regime, the Certification Regime, and the Conduct Rules.

 

The final session will then guide attendees through guidance provided by the FCA, how to undertake a firmwide SMCR Operational Gap Analysis and Impact Assessment and will also guide attendees through the intricacies of implementing SMCR operational compliance. There is no doubt that the SMCR framework is complex, and firms need to ensure that they receive the most comprehensive training in this area in order to avoid regulatory fines and in order to ensure that are compliant in line with the looming 2019 implementation deadline.

 

Day 1

 

SESSION 1: The Senior Managers Regime

·       How the Senior Managers Regime applies to: (1) Core Firms (Definition and Application); (2) Limited Scope Firms (Definition and Application); (3) Enhanced Firms (Definition and Application); (4) Branches; FCA Firm Checker Too.

·       Senior Management Functions (SMFs); Senior Managers; Conditions and Time Limits; FCA Approval; Statement of Responsibilities (SYSC 10C.11); Duty of Responsibility; Breach of Duty of Responsibility; Decision Procedure and Penalties Manual (DEPP); Guidance on Enforcing the Duty of Responsibility.

·       Prescribed Responsibilities (PRs) (SYSC 24); Core PRs; Limited Scope SMFs; SMFs for Enhanced Firms; Dividing and Sharing PRs; Overall Responsibilities; Responsibility Maps (SYSC 25; SYSC 25 Annex 1; SYSC 25.2.3R); Regular Assessment of Fitness and Propriety; Annual Certification; Significant Changes (SUP10C); Overseas Senior Managers; The 12-Week Rule; Outsourcing under the SMR.

 

SESSION 2: The Certification Regime (SYSC 27)

·       Individuals subject to the Certification Regime (those whose job can cause significant harm to the firm or its customers); Senior Managers and the Certification Function.

·       Certified Functions (Algorithmic Trading; CASS Operational Oversight (CF10a); Certified Function Supervisors or Managers; Client Dealing; Material Risk Takers; Proprietary Traders; Significant Management (CF29); Training and Competence Regime Qualification).

·       Significant Management Certification Function; Significant Business Unit (BU) Factors; Commercial Activity BUs; Internal Support Department BU (SYSC 27.7); Certification and Territorial Limitation; The Fit & Proper Test; Evidence; Criminal Records Checks; Regulatory References.

 

SESSION 3: The Conduct Rules

·       About the Conduct Rules; Background to the Conduct Rules; Who the Conduct Rules Apply To (Senior Managers; Certified Functions; Non-Executive Directors; Employees); Ancillary Staff; Employee Conduct Rule Training (FSMA 64B); Conduct Rules Breach and Disciplinary Action (FSMA 64C).

·       FIRST TIER – Individual Conduct Rules (Integrity; Due Care, Skill and Diligence; Open and Cooperative; Due Regard to the Interests of Customers and Fair Treatment; Observe Proper Standards of Market Conduct).

·       SECOND TIER – Senior Manager Conduct Rules; SC1 (Reasonable Steps and Effective Control); SC2 (Reasonable Steps and the Regulatory System) SC3 (Reasonable Steps and Delegated Responsibilities) SC4 (Appropriate Disclosure).

 

SESSION 4: SMCR Operational Compliance

·       FCA Policy Statement PS18/14; FCA Consultation Paper CP18/19 on a New Public Directory; The Interaction between Legal, Risk, Management, and Human Resources (HR); HR Senior Management Assessment and Certification Process; Policies (Breach Reporting; Regulatory Referencing; Whistleblowing).

·       Firmwide SMCR Operational Gap Analysis and Impact Assessment (Organisational HR Operational Policies; Internal Arrangements); Identification, Assessment, and Mapping of Responsibilities; Updating of Job Descriptions, Contracts, and HR Policies and Procedures.

Changing SMCR Firm Type; Function Mapping for Core and Limited Scope Firms; Forms Summary; Example Firms; How SMR might apply to an Example Firm; How the Certification Regime applies to an Example Firm; How the Conduct Rules apply to an Example Firm; Operational Challenges.

 

 
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Key Benefits

· Attendees will be comprehensively guided through the SMCR framework and will develop an extensive understanding of the broad-ranging requirements.

· Attendees will be provided with highly comprehensive training materials comprised of a 200+ page Training Course Manual, Training Course Materials Manual, Four PowerPoint Sessions, and an Example Firm Responsibility Map.

· Attendees will be able to undertake a firmwide SMCR Operational Gap Analysis and Impact Assessment.

· Attendees can avail themselves of refreshments (orange juice, tea, coffee, latte, americano, still and sparkling water, lemon water, biscuits, snacks) all day, and can also choose from a broad range of sumptuous hot and cold dishes from the lunchtime restaurant buffet.

Presented by Rodrigo Zepeda the Co-Founder of Storm-7 Consulting and the author of “The ISDA Master Agreement 2012: A Missed Opportunity?” and “Optimizing Risk Allocation for CCPs under the European Market Infrastructure Regulation”
 

EXPERT TRAINER

Rodrigo Zepeda is Co-Founder and Managing Director of Storm-7 Consulting. He is an expert consultant who specialises in derivatives and banking and financial services law, regulation, and compliance. He is an expert in a very broad range of regulatory compliance frameworks such as FATCA, the OECD CRS, MiFID II, MAD 2 MAR, PSD2, CRD IV, Solvency II, OTC Derivatives, CCP Clearing, PRIIPs, BRRD, AML4, and the GDPR. He holds a LLB degree, a LLM Masters degree in International and Comparative Business Law, and has passed the New York Bar Examination. He was an Associate (ACSI) of the Chartered Institute for Securities & Investment from 2004 to 2014 and is now a Chartered Member (MCSI). He has created and delivered numerous conferences and training courses around the world such as 'FATCA for Latin American Firms' (Santo Domingo, Dominican Republic, Panama City, Panama), 'MiFID II: Regulatory, Risk, and Compliance (London), and 'Market Abuse: Operational Compliance' (London), 'AEOI (FATCA & CRS)' (Manama, Bahrain). He has also delivered numerous In-House Training Courses around the world to major international financial institutions such as The Abu Dhabi Investment Authority (MiFID II: Operational Compliance, Abu Dhabi, the United Arab Emirates), the United Nations Principles of Responsible Investment (MiFID II: Final Review, London), CAF, the Development Bank of Latin America (Swaps and Over-the-counter Derivatives, Lima, Peru), Rothschild Investment Management (UK) Limited (AEOI (FATCA & CRS), London) and Bethmann Bank AG (MAD 2 MAR, Frankfurt). He is a Reviewer for the Journal of Financial Regulation and Compliance and has also published widely in leading industry journals such as the Capco Institute's Journal of Financial Transformation, the Journal of International Banking Law and Regulation, as well as e-books on derivatives law. Noted publications include "Optimizing Risk Allocation for CCPs under the European Market Infrastructure Regulation"; "The ISDA Master Agreement 2012: A Missed Opportunity"; "The ISDA Master Agreement: The Derivatives Risk Management Tool of the 21st Century?"; "To EU, or not to EU: that is the AIFMD question"; and "The Industrialization Blueprint: Re-Engineering the Future of Banking and Financial Services?".

 
 

EXAMPLES OF PAST PARTICIPANTS AT S7C TRAINING EVENTS

 

Disclaimer

ISDA® is a registered trademark of the International Swaps and Derivatives Association, Inc., and Storm-7 Consulting Limited is neither sponsored by nor affiliated with the International Swaps and Derivatives Association, Inc. (ISDA), and the public is hereby informed that Storm-7 Consulting Limited holds no commercial, private, or other relationship with ISDA.