Templates for SMCR Conduct Rules

Posted on by Know Your Compliance

 

SMCR Policy Toolkit

If you require a template for creating a Conduct Rules Policy or are looking to develop the mandatory bespoke Conduct Rules Training for your employees, our SMCR Policy Template Toolkit contains templates for both.

The toolkit also includes templates for FIT assessments, SMF induction checklist & onboarding, firm type assessment, SMCR policy, Statement of Responsibilities, PR register, responsibilties map and more. 

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SMCR Policy Template Toolkit
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SMCR Policy Template Toolkit

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SMCR Conduct Rules Policy & Training

The FSMA has given the FCA new powers to write conduct rules that can apply to all employees within a firm and not just those who are approved individuals and/or performing controlled or senior manager functions.

These rules can help shape the culture, standards and policies of firms as a whole and promote positive behaviours that reduce harm. There are two tiers of rules that apply to individual and/or senior managers: –

  • First Tier – Individual Conduct Rules
  1. You must act with integrity
  2. You must act with due care, skill and diligence
  3. You must be open and cooperative with the FCA, the PRA and other regulators
  4. You must pay due regard to the interests of customers and treat them fairly
  5. You must observe proper standards of market conduct
  • Second Tier – Senior Manager Conduct Rules
  • SC1 You must take reasonable steps to ensure that the business of the firm for which you are responsible is controlled effectively
  • SC2 You must take reasonable steps to ensure that the business of the firm for which you are responsible complies with the relevant requirements and standards of the regulatory system
  • SC3 You must take reasonable steps to ensure that any delegation of your responsibilities is to an appropriate person and that you oversee the discharge of the delegated responsibility effectively
  • SC4 You must disclose appropriately any information of which the FCA or PRA would reasonably expect notice

Conduct Rules Policy

A policy for conduct rules should provide the company’s objectives and measures for complying with the FCA’s conduct rules and demonstrate how these rules are communicated to all employees.

It should include how the firm expects it’s employees to comply with each rule, for example: –

Act With Integrity – “Staff must not (or attempt to) mislead clients, colleagues, the Company or any associated regulator in any way or falsify, destroy, or cause the destruction of documents or information. All information must be accurate and a true representation of the facts and should have supporting evidence where risks are involved. Staff must pay due regard to the interests of the customer and must be aware of and report suspected breaches of the COCON rules with immediate effect.”

 

Conduct Rules Training

It is important that firms develop their own training sessions when it comes to the SMCR conduct rules as every firm is different. How a company expects employees to act with integrity orobserve proper standards of market conduct will depend heavily on their size, scope, business type and the products/serviecs that they offer.

That is why our SMCR Toolkit contains extensive guidance on how to develop your own conduct rules training as oppose to writing a session that is too generic and therefore non-compliant.

We cover all rules and provide working examples of how employees can understand and comply with each, as well as providing content on what each rule means in the regulatory framework.