The Impact of the Extended Senior Managers Regime on Screening Requirements

The Senior Managers Regime (SMR) is part of the UK financial regulation introduced by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) and is aimed at increasing personal accountability of senior level people in the financial services industry. The SMR was initially implemented in the banking sector after the 2008 financial crisis, considered the worst economic crisis since the Great Depression. The SMR’s purpose is to reduce consumer risk and strengthen market integrity by holding financial services managers in senior positions accountable for their conduct and competence. The SMR covers both domestic and international firms with UK operations.

The FCA’s expanded scope of SMR requirements will go into effect May 2018, and extends beyond the banking industry to include insurers and solo-regulated firms. Some facets of the current banking regime will also be affected. This will significantly increase the number of firms required to comply and bring an end to the current Approved Persons Regime (APA).

Individuals working in a ‘Senior Management Function’, as defined by the FCA, must be approved by the FCA before taking on the responsibilities of the role. In addition, firms will need to ensure the suitability of the Senior Manager by completing a ‘fit and proper’ assessment.

As a result, firms need to certify at least annually that senior managers are suitable to perform their job functions. It is proposed that firms should perform criminal record checks for each Senior Manager and obtain a ‘regulatory reference’ from the Senior Manager’s previous firm.

At Cisive, we are experts in the specific risks and regulations that apply to regulated industries. For many years, we have provided tailored solutions to meet the unique requirements of our financial services clients.

In 2017 we opened an international operations centre in London, England to manage our global screening business. We recognize the specific challenges that our clients with a UK presence face, from managing Brexit contingency planning, to implementing General Data Protection Regulation (GDPR) compliant procedures, dealing with MiFID 2, in addition to preparing for SMR changes.

At Cisive we are prepared for the extended SMR and GDPR regulations and will contractually support you as a data controller in the background screening process. As a data controller, we will stand alongside our clients and assume responsibility for implementing and managing employee screening procedures in compliance with GDPR.

Cisive has rolled out a suite of SMR specific screening solutions to help ensure efficient and effective application of the new regulations. Our Senior Manager Regime solution includes:

• Digital, touch-free inbound and outbound Disclosure and Barring Service checks for basic and standard disclosures
• Continuous criminal monitoring service
• FCA ‘fitness and propriety’ package
• Regulatory reference regime compliant service
• Education and employment checks performed by our UK-based team
• Full GDPR compliance and indemnification

If you are a financial services institution providing financial services in the UK, any and all employees considered senior decision makers fall under the scope of the new regulation.

With more than 40 years of experience, Cisive offers the most efficient and effective solution for the financial services industry.

For more details or to further discuss how Cisive can help your organization meet the extended requirements of the GDPR and Senior Manager Regime, please contact us at +1 866-557-5984 or email [email protected].

 

 

Rob Jones
VP and General Manager
Global Executive Intelligence Division

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