How to Write an SMF Handover Policy
Oct
The Senior Managers and Certification Regime (SMCR)
Undertsanding how to write an SMF handover policy is just one of the aspects required to comply with the Senior Managers and Certification Regime (SMCR). Most dual and solo-regulated firms are required to comply with the SMCR and COCON rules set out in the FCA Handbook.
There are 3 main elements that make up the SMCR. These are the Senior Managers Regime; Certification Regime and the Conduct Rules. The FCA state that the “SMCR aims to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence”.
SMCR Tiers
The rules and requirements in the Senior Managers part of the regime apply differently to solo-regulated firms depending on their designated category.
The 3 categories aim to apply the regime proportionately based on the size of each firm. Each business is responsible for determining their category and adhering to the rules and standards applicable to each.
The 3 tiers under the SM&CR are:
- Core: firms in this tier must comply with the baseline requirements.
- Enhanced: this applies to a small number of firms whose size, complexity and potential impact on consumers or markets warrant more attention. These firms have extra requirements.
- Limited Scope: this applies to firms who already had/have exemptions under the Approved Persons Regime. These firms are exempt from some baseline requirements and typically have fewer senior management functions.
SYSC 25.9 Handover Procedures and Material
The requirement to have documented SMF handover procedures only applies to enhanced scope firms. However, it is useful for all scopes to have a process for handing over roles and ensuring adequate information and materials have been supplied.
Section SYSC 25.9 of the FCA Handbook sets out the rules for handover materials. Firms with obligations under the SMCR must take all reasonable steps to ensure that all information and materials are provided to the relevant person to enable them to perform their job and responsibilities effectively. Relevant persons include: –
- A person who is becoming an SMF manager.
- An existing SMF manager.
- A person taking on a new job or new responsibilities.
- A person whose responsibilities or job are being changed.
- Anyone who has management or supervisory responsibilities for an SMF manager.
SMF Handover Policy Contents
Your SMF Handover Policy should set out your aims and objectives for complying with the SYSC 25.9 rules. The content should also point to the SMF Handover document that contains your processes and controls for actual handovers of Senior Manager functions and roles.
Any person taking over an SMF role must be provided with a procedure backed handover period. This includes the provision of an SMF Handover Document which should be used to update, reassure, train and inform the person of their responsibilities, duties and expectations.
Your policy aims and objectives can include (but are not limited to): –
- Complying with the FCA Handbook regulatory requirements.
- Meeting the SYSC 25.9 rules and standards.
- Have an effective and up to date SMF Handover Policy and process in place at all times for each Senior Manager function and role.
- Assist, inform and support all SMF managers with their new or revised responsibilities and roles.
Sample SMF Handover Policy Template
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