FIA EPTA has responded to HM Treasury and to the Financial Conduct Authority in parallel consultations on reforms to the Senior Managers & Certification Regime.
FIA EPTA members strongly support reform of the SMCR as a unique opportunity to support the UK’s competitiveness and growth objectives. To that end, FIA EPTA supports the removal of the SMCR from legislation (the FSMA 2000) and the development of a more proportionate regime by regulators.
A reformed regime should be more risk-based, tailored to the specificities of the market (e.g. wholesale versus retail or consumer market) and to the size, complexity and business models of regulated firms. The FCA also should have flexibility to reduce the overall number of Senior Management Function (SMF) roles, as current requirements are disproportionately high for some roles carrying no material risk for the market, and to reduce pre-approval roles in order to relieve unnecessary administration and increase firms’ agility to recruit.
For the sake of recruitment of international talent, FIA EPTA also strongly recommends the reform of UK remuneration rules for non-bank firms. Its members believe that these rules, a part of the Basel banking framework, have discouraged international professionals from relocating to the UK – which, along with the EU, is the only major global financial jurisdiction to apply these constraints to the non-bank sector.
FIA EPTA also suggests the removal of unnecessary red tape, including annual re-certification. For these and other recommendations, read the full consultation responses here: HMT and FCA.
