The FCA has published further information on its website for FCA solo-regulated firms, in particular sole traders, relating to the extension of the Senior Managers and Certification Regime (the SM&CR).
The FCA has updated its checklists for solo-regulated firms implementing the SM&CR to help ensure compliance.
Form K guidance
Part of the checklist includes submitting a Form K.
Enhanced Firms and some Core Firms will need to submit a Form K, notifying the FCA of the approved persons who should be converted to a mapped Senior Management Function (SMF).
Form K must be submitted by 23.59 on 24 November 2019 and a firm’s SMFs will appear on the financial services register on 9 December 2019. Therefore, on or shortly after 9 December 2019, firms should check the financial services register to ensure that the correct SMFs are included.
The FCA has also updated its website to include a section with information for sole traders.
Sole traders are Limited Scope firms. The only SMFs that will normally apply are SMF29 (Limited scope function) and SMF16 (Compliance oversight function). More information can be found on the FCA’s website.
From 9 December 2019, the SM&CR will apply to all Financial Services and Markets Act (FSMA) authorised firms, including banks, building societies, asset managers, investment firms, insurers, mortgage providers, consumer credit firms and sole traders.
The FCA can impose fines and even custodial sentences for serious breaches of the rules imposed by the SM&CR. Since the regime was introduced for banks, there has been a steady increase in fines against individual defendants as opposed to firms.