FCA Consultation on extending implementation deadlines for the Certification Regime and the Conduct Rules
The FCA is consulting on extending the deadlines by which FCA solo-regulated firms must have first assessed the fitness and propriety of their Certified Staff and for training staff in the Conduct Rules and reporting Directory Person data.
The Treasury will lay a Statutory Instrument (SI) before Parliament to delay the deadline to the Certification Regime until 31 March 2021. This delay will give firms significantly affected by the coronavirus pandemic time to make the changes they need.
This consultation proposes making changes to the FCA rules to effect this change. It also proposes making a corresponding extension to the deadline for training staff in the Conduct Rules and reporting Directory Person data to 31 March 2021. Extending the deadlines will ensure they remain consistent and will provide extra time for firms that need it, and enable them to deliver effective training on the Conduct Rules. The proposals seek to reduce the burden on firms affected by the pandemic, while ensuring that regulatory standards and consumer protection are upheld.
The FCA want to give regulated firms certainty, so it is consulting alongside the parliamentary process, to allow it to finalise its policy as soon as possible.
The FCA will still publish details of certified employees of solo firms starting from 9 December 2020 on the Financial Services Register, as firms submit them. Where firms are able to provide this information before March 2021, the FCA encourages them to do so.
Who this applies to
- All FCA solo-regulated firms authorised to provide financial services under Financial Services and Markets Act 2000 (FSMA).
- Appointed Representatives (ARs) would also be in scope of the proposed extension to the reporting deadline for Directory Persons.
- These proposals do not apply to benchmark administrators.
Background to the Certification Regime and Conduct Rules
The Senior Managers & Certification Regime (SM&CR) is designed to reduce harm to consumers and strengthen market integrity. FCA solo-regulated firms were given until 9 December 2020 to assess the fitness and propriety of certified staff, submit information to the FCA about certified staff (Directory Persons) for inclusion on the FS Register and provide tailored training to all other employees, except ancillary staff, on the Conduct Rules. Firms should continue with their programmes of work in these areas and if they are able to certify staff earlier than March 2021 they should do so.
The FCA expects accountable Senior Managers to ensure that all Certified Persons are fit and proper. Firms should not wait to remove staff who are not fit and proper from certified roles. Similarly, accountable Senior Managers must ensure that Conduct Rules training is effective, so that staff are aware of the Conduct Rules and understand how they apply to them in their jobs. These programmes will require planning, time and effort to deliver effectively. The FCA will produce further communications about the FCA’s expectations. Senior Managers and Certified Persons are already subject to the Conduct Rules and the FCA will hold them accountable for any misconduct arising during and after the coronavirus pandemic.
Benchmark administrators
The Certification Regime and reporting of Directory Persons do not apply to benchmark administrators, so the FCA does not intend to consult to move the deadline for benchmark administrators. Benchmark administrators have until December 2021 to train non-Senior Manager staff in the Conduct Rules.
The FCA does not consider that the current crisis will prevent effective implementation of Conduct Rules training in these firms and so it is not considering extending this deadline.
The consultation is open until the 14 August 2020.