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Extended period to implement SM&CR

Updated: Jan 29, 2021

The Treasury has agreed to delay the deadline for firms to implement the second phase of SM&CR.

Rather than aiming for 9 December 2020, firms will now have a deadline of 31 March 2021 by which to have undertaken the first assessment of the fitness and propriety of all Certified Persons.

Firms were already expected to have completed the large majority of SM&CR planning by 9 December 2019, including the identification and training of Certified Persons. The second phase of implementation allowed additional time to perform the first assessment of all Certified Persons.

The additional 3 months could be great news if Covid-19 has set you back in your SM&CR implementation plan. However, the message from the FCA quickly moves on to say that firms should continue with their SM&CR programmes, and if they are able to certify staff earlier than March 2021, they should do so. The phrasing used is that this is for firms “significantly affected” by the pandemic. So, this is not a carte blanche to delay phase 2, but if you will need extra time to complete, your assessment of Certified Persons, this could be valuable wiggle room.

It’s worth noting that the FCA also specifies that firms should not wait to remove staff from certified roles where they are not fit and proper. Therefore, if you have cause to doubt someone’s fitness and priority you may want to prioritise these certifications and certainly not shy away from any difficult decisions should the need arise between now and March.

Another factor in this development is the confirmation that the register listing certified staff is still planned to be in place in December 2020. With that in mind, it’s also worth noting that customers and third parties may see some disparity between December and March between different firms.

The FCA is going to consult on the change for completeness and will time this to coincide with the parliamentary process.


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