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IAR for insurers, investment firms and consumer credit firms (FSMA Firms)

Following the recent proposed extension of the Senior Managers and Certification Regimes (SMR & CR) to all UK financial services firms, replacing the Approved Persons regime, it is vital that companies start considering the appropriate systems, controls and processes they need to have in place to demonstrate compliance and mitigate risk. So what will it involve?

  • An approval regime focused on senior management, with requirements on firms to submit robust documentation on the scope of these individuals’ responsibilities
  • A statutory requirement for senior managers to take reasonable steps to prevent regulatory breaches in their areas of responsibility
  • A requirement on firms to certify as fit and proper any individual who performs a function that could cause significant harm to the firm or its customers, both on recruitment and annually thereafter
  • A power for the regulators to apply enforceable Rules of Conduct to any individual who can impact their respective statutory objectives

With the proposed extension expected to come into operation during 2018, firms need to start thinking now about how they will tackle IAR and what measures and systems they will use to manage the processes and gather and record relevant information to demonstrate accountability in their business. In essence each firm will need to become a mini regulator for their own staff. Some of the main aspects of the extended regime that companies need to consider will include:

  • Assigning Senior Management Functions (SMF and SIMF) and Prescribed and other responsibilities.
  • Managing and tracking pre-approval applications
  • Capturing appropriate evidence to help senior managers with their Statutory Duty of Responsibility
  • Producing and maintaining Statements of Responsibility and Responsibility and Governance Maps
  • Delivering and capturing the results of mandatory conduct and whistleblowing training
  • Managing Fit and Proper assessments
  • Certification and re-certification for Certification Regime (CR) staff
  • Managing and recording hand over processes
  • Defining, measuring and managing knowledge, skills and conduct related competencies to evidence Fitness and Propriety
  • Managing conduct breaches and regulatory notification
  • Measuring the impact of good conduct on the commercial performance of the business

AITrackRecord can help your firm address the regulatory aspects of the Senior Managers Regime (SMR), Senior Insurance Managers Regime (SIMR), Certification Regime (CR) and Conduct Rules to make it easier to successfully manage and keep track of all aspects of IAR including:

  • Awareness of the implications for your firm and the outcomes you need to achieve
  • Building on the lessons learned and challenges from implementation without systems
  • Fit and Proper assessments
  • Regulatory pre-approvals
  • Senior Management Functions (SMF and SIMF) allocation
  • Statements of Responsibilities
  • Responsibilities and Governance Maps
  • Certification and recertification
  • Hand overs
  • Conduct Rules training and adherence
  • Compliance Breach Management
  • Key Performance Indicators (KPI) tracking
  • Record Keeping

Regulatory References will have an impact on accountability regimes in all firms, we will be able to provide more clarity on what these are and the solutions to the problem after the Regulator has completed consultation later in 2016 and published its final rules.

We will enable you to easily provide or point towards the answers to the fundamental questions that will be asked by your firm and by the FCA and PRA about the conduct of your senior managers and employees.

Our expertise will empower you to manage the following aspects of IAR:

Senior Managers Regime

  • Assign and track Senior Management Functions to senior manager roles in your firm
  • Produce Statements of Responsibility and obtain individual sign-off and acceptance
  • Build and maintain Responsibility and Governance Maps
  • Develop a culture of accountability and quality evidence

Certification Regime

  • Deliver and evidence Fit and Proper assessments
  • Record, monitor and manage Certification
  • Pro-actively notify users and managers of upcoming lapses in Certification Regime compliance
  • Keep robust, fully auditable records and evidence

Conduct Rules

  • Deliver and monitor Conduct Rules training for Senior Managers and other staff
  • Oversee adherence to Conduct Rules
  • Manage breach notifications

If you would like to find out how we can help your firm tackle these and other Individual Accountability Regime challenges, please get in touch.

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