This will affect directors and leaders of pawnbroking firms. The consultation (CP 17/25) will be open until 3rd November and NPA will respond in due course.
The SM&CR regime replaced the Approved Persons Regime for banking firms in March 2016 and now it is planned to extend this to Consumer Credit firms, most likely by autumn 2018. This will mean the FCA will be able to hold individual directors personally responsible and accountable. A senior manager is likely to be a director with senior responsibility for a function, and will have to be registered with the FCA. They have a duty of responsibility to prevent breaches. For larger firms a team leader is likely to have certified responsibilities. These managers would not have to be registered with the FCA but will need to certified by the firm as a fit and proper individual and this will have to be checked at least annually by the firm, such as criminal record checks and reviewing their competence, for example through an annual appraisal .
The senior managers will be expected to ensure that there are Conduct rules in place for employees directly involved in financial services and also more stringent rules for senior managers. So the firm would need to produce an up to date Responsibilities Map showing who takes responsibility for each senior management function, and also a Handover Procedures/manual for new Senior Managers.
Jonathan Davidson, Executive Director of Supervision- Retail and Authorisations, FCA, said:
“Culture and governance in financial services and its impact on consumer outcomes is a priority for the FCA. The extension of the Senior Managers and Certification Regime is key to driving forward culture change in firms…. The new Conduct Rules will ensure that individuals in financial services are held to high standards, and that consumers know what is required of the individuals they deal with. The regime will also ensure that Senior Managers are accountable both for their own actions, and for the actions of staff in the business areas that they lead.”
It is likely that there will be a decrease in people wanting to take on responsibility for senior management compliance especially since reckless misconduct under section 36 of the Fin Services Act 2013 will be a criminal offence.
Roma Pearson, Head of Consumer Credit at the FCA will speak on this important topic and how it affects pawnbrokers at the NPA Annual Conference on 13th October, for tickets contact email@example.com