What is SMCR?
The FCA SMCR stands for the UK’s Financial Conduct Authority’s Senior Managers and Certification Regime, a set of rules in the UK aimed at making people working in UK financial services more accountable and transparent.
The regime was approved and introduced by the Financial Conduct Authority in response to the financial crisis and various misconduct issues in the financial services sector. The regime was first implemented for the banking sector on March 7, 2016. Subsequently, it was extended to cover insurers from December 10, 2018, and finally to all FCA solo-regulated firms on December 9, 2019.
What is a Statement of Responsibilities under SMCR?
The Statement of Responsibilities under the SMCR is a document that clearly defines what each senior manager in a financial services firm is responsible for, ensuring there’s no confusion about their duties. It lists both mandatory responsibilities set by the FCA, such as dealing with financial crime, ensuring regulatory compliance, and overseeing internal systems, as well as any additional tasks assigned by the firm.
This document needs to be formally written, submitted to the FCA during the approval process, and kept up-to-date with any changes in the manager’s role. Regular reviews and updates are necessary to ensure its accuracy. The Statement of Responsibilities helps ensure everyone knows their duties and makes it easier to hold senior managers accountable for their specific areas of responsibility.
What are the Individual Conduct Rules under SMCR?
The Individual Conduct Rules under the SMCR are the basic standards that everyone in a financial services firm needs to follow and promote good behaviour and professionalism. These rules include acting with integrity, which means being honest and straightforward in all business dealings with clients. Relevant employees must also work with due care, skill, and diligence, ensuring they do their jobs competently and diligently.
Cooperation with the FCA, PRA, and other regulators is very important, meaning employees should be open, provide accurate information, and not mislead regulators. They should also act in the best interests of customers, treating them fairly and not misleading them.
Furthermore, employees must follow proper standards of market conduct, adhering to all relevant laws, regulations, and professional standards. These rules aim to create a culture of accountability and ethical behaviour, protecting consumers and maintaining the financial system’s integrity. Finally, the Individual Conduct Rules are part of cross-cutting rules under principle 12.
What are the Senior Manager Conduct Rules?
The Senior Manager Conduct Rules under the SMCR are extra standards for senior managers (FCA Approved Persons) in financial services firms, building on the basic Individual conduct rules for everyone else.
1. Effective Control
- Senior managers need to make sure their part of the business is run effectively.
2. Regulatory Compliance
- They must ensure their business area follows all relevant regulatory requirements and standards.
3. Proper Delegation
- When delegating tasks, senior managers must ensure the person they are delegating to is competent and the delegation is appropriate.
4. Regulatory Disclosure
- Senior managers need to inform regulators about anything they should reasonably be aware of.
These rules make sure senior managers are responsible for their actions and the areas they oversee, promoting a culture of accountability at the top of the firm.
What is the Duty of Responsibility?
The FCA Duty of Responsibility is a set of rules from the UK’s Financial Conduct Authority aimed at making senior managers in financial firms more accountable for their actions.
- Holding Senior Managers Accountable: Senior managers in financial firms are responsible for what goes on in their areas. If their firm breaks the rules, these managers can be held responsible if they didn’t take reasonable steps to prevent it.
- Reasonable Steps: To avoid trouble, senior managers need to show they did everything they could to make sure their part of the business follows FCA rules. This means setting up good systems, keeping an eye on things, and fixing problems quickly.
- Clear Responsibilities: Firms need to clearly spell out what each senior manager is responsible for. This way, everyone knows who’s in charge of what, and it’s easier to hold people accountable if things go wrong.
- Consequences: If a firm breaks the rules and a senior manager didn’t do enough to stop it, the FCA can take action against them. This could mean fines, being banned from the industry, or other penalties.
- Promoting Good Culture: The goal is to encourage a culture where senior managers take their responsibilities seriously and make sure their firms act ethically and follow the rules.
In short, the FCA Duty of Responsibility makes sure that senior managers in financial firms are doing their job properly and can be held responsible if they don’t.
Why are those Rules Important?
All the above points are crucial for the FCA because they help ensure financial firms act fairly, transparently, and responsibly. This is achieved by holding senior managers accountable; the FCA makes sure those at the top take their roles seriously, addressing problems quickly and effectively. Requiring managers to take reasonable and sufficient steps for compliance encourages a proactive approach to managing risks and following rules, which reduces the chances of breaches and fosters a culture of adherence.

Kyriakos Christofidis is an Assistant Director at Complyport’s Authorisations Division and an FCA Approved Person (SMF16/27). He obtained a B.A. in Business and Finance from the University of Derby (UK) and an L.LB. from the Open University (UK). He also holds a number of certifications from UK and EU Financial Services Regulators, to provide financial services within the EU & UK, including regulatory compliance.
Having worked in a variety of senior management roles in compliance and strategy over the last 10 years, Kyriakos’ experience covers multinational Law Firms, Regtech and Fintech, alternative investment funds (AIFs), MiFID firms and other UK and EU regulated entities. His involvement in the provision of professional financial services in different jurisdictions has helped him develop an inquisitive and proactive approach to regulatory matters, one that readily provides his clients with solution-oriented professional advice for a wide array of complex matters in several jurisdictions