What is the SMCR?
The SMCR has been introduced in a phased implementation since 2016 for banks, insurers and other FSMA authorised persons. It aims to reduce harm to consumers and strengthen market integrity by changing behaviours and culture within firms. Applicable in a tiered way to staff at different levels, the SMCR encourages a culture where staff at most levels take personal responsibility for their actions and ensures that firms and staff clearly understand, and can demonstrate, where responsibility lies within the organisation. When something goes wrong, this in turn enables the regulator to identify individual culpability (and take action when appropriate).
Why is this happening?
HM Treasury notes that FMIs have performed effectively under recent stressed conditions. However, it is concerned that the existing regulatory regimes for FMIs make very limited provision for oversight of individual conduct within these…