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The scope of the client-dealing function under SM&CR

Updated: May 19, 2021

When the Senior Managers & Certification Regime (SM&CR) arrived, the concept of the client-dealing function remained. It is now one of the functions that requires the holder to be certified, albeit that this is now done by the regulated firm rather than by the FCA.

However, the scope of the client-dealing function goes wider than the CF30 function used to. If you looked at the initial definition, you would have been left thinking that this includes anyone dealing with the persons, or property of those persons, that the firm provides regulated services to. That isn't limited to clients.

For many firms, they could identify a wide range of individuals dealing directly with such persons and their property. Had the FCA intended the reach of this function to be so wide?

The FCA clarified that firms should exercise discretion over who needs to be certified in the client-dealing function. In particular the FCA added in to the guidance in SYC 27 that firms should consider the level of automation in a person's role and/or their need to exercise judgement or significant skill in determining whether someone requires certification in the client-dealing function.

This allows the firms to exercise judgement on whether a role requires certification.


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