Risk and Compliance
Who is involved with activities at this firm?

25th May 2021

As part of the Financial Conduct Authority’s (FCA) drive towards greater individual accountability, SM&CR was introduced to the insurance sector a few years ago. The intention was/is to clearly identify who is responsible for different aspects of a broker’s business and for senior managers in particular to understand that they have a duty of responsibility.

Senior Management Function (SMF) holds ultimate accountability and responsibility of the firm. SMFs can delegate ‘some’ responsibility (not Accountability of course) to those employees that are ‘fit and proper’ (eg HR enhanced checks, training, etc) to fulfil the specific functions under the SM&CR. This could be a Certified Person (CP) function, for example a Material Risk Taker (MRT) such as a broker placing a risk, committing the firm to a risk.

The big change that the SM&CR introduced is that SMFs, as well as individuals classified as Certified Persons, now have to be registered and approved by the FCA and be present on the FCA public register.

It is therefore up to the SMFs of the regulated firm to decide who is and who is not certified. They must assess each employee based on their activities.

Firms have an obligation to update the directory information within a set timescale as per FCA Handbook rules. The FCA updates any disciplinary or regulatory information immediately, but I can’t stress enough the importance to ensure firms have appropriate systems and controls in place to ensure this data is updated for SMF and Certified Persons.

As you may be aware, the FCA has contacted some firms recently that have not updated their FCA Certified Person Directory recently, so it is worth just checking your firm’s details and that everything is completed accordingly.

In addition to the fact that you do not really want the FCA asking you to update your SMFs and CP data, bear in mind the brand perception, not only if one of your retail personal or commercial clients checked the FCA register, but on the markets and facilities with whom you have agencies or would like to have agencies with, while carrying out their due diligence if you don’t keep your records up to date. Moreover, the ‘Who is involved with activities at this firm’ section of the FCA register will assist you in your own due diligence checks.

I can’t stress enough the importance of checking your firm’s FCA Firm Details which relate to the public and private information that can be accessed through the FCA online system for your firm. As you may be aware, it is a regulatory requirement to check this and more importantly to formally confirm to the FCA through their online system, so you must actively confirm this with them through submission. It is your firm’s and, following SM&CR, your SMFs’ obligations to ensure these details are accurate and confirmed at least annually with the FCA (a simple way to check if your firm has done this is to search the FCA register and look under ‘Who is this firm’ and you will note if a date when done is available or statement if not done).

Stay safe.

Barry Holmes Dip(Comp) MICA, Spec.Cert(Sanctions), Spec.Cert(CorpGov), Spec.Cert(Conduct), Cert.(FinCrime), Cert.(Comp), Cert.(AML), AwSRE, Spec.Cert(AML- PrivBanking), AwCCH, UKFR, Cert.(KYC/CDD), Cert.(CFT), Spec.Cert(ABC), Spec.Cert(AML - Gaming), Spec.Cert(FinCrime.MFS), Spec.Cert(AML - CorrBanking), Spec.Cert(AML - Trade), Spec.Cert (AML - NewTech), Spec.Cert(FinCrime.GMB), CCRS

Head of Risk & Compliance

Iris Insurance Brokers Limited

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