FCA – Certification Regime considerations for all firms – Annual Certification

Firms must assess their Senior Managers and Certification Staff are fit and proper (F&P) to perform their roles annually. The first annual assessment requirement was due to have been completed by 9 December 2019. However, the deadline was extended and is now required to be undertaken by 31 March 2021.

Certification staff
Individuals who are not F&P cannot commence, or continue to perform, certification functions.

Certification staff assessed as F&P must be provided with a Certificate confirming the firm is satisfied the person is F&P to perform the function to which the certificate relates and set out aspects of the affairs of the firm in which the person will be involved in performing the function.

The FCA has said that in a good implementation of F&P:

  • The accountable Senior Manager should have adequate oversight over the certification process. This shouldn’t be delegated entirely to another function such as HR or Compliance.
  • Firms should ensure they maintain up to date, accurate lists of their certification staff.
  • There should be development plans where areas of improvement are identified during assessments.

There are some additional considerations for larger firms:

  • When designing F&P assessment processes, first line management should own the process, giving thought to individual requirements for specific roles.
  • Managers must be adequately trained so they know what is expected of them.
  • Formalising capability frameworks and job descriptions help managers make consistent and thorough F&P assessments.
  • The certification requirements should be integrated into existing HR and performance management processes, including what happens if someone fails the assessment.
  • Some assessments will not be clear cut. Panels including senior managers can be used to consider marginal assessments.

The FCA’s website provides more information, including examples of positive and negative indicators of the Certification Regime.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

This extended deadline was set so that firms significantly affected by the coronavirus pandemic had time to make changes.

Firms that have not already carried out their annual F&P assessment for SMFs and Certification Staff should start the process soon so that they meet the FCA’s extended deadline.

Action Required By You

  • ATEB can assist firms with the process of F&P assessment and preparation of Certificates;
  • Contact your ATEB Consultant for assistance with any aspect of SM&CR or contact ATEB here.
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Technical Manager - Often referred to as the Oracle or the Sage, Alistair has a wealth of financial services experience. He is our go-to Technical Manager and enjoys nothing more than a complicated conundrum. Feel free to test his renowned knowledge by getting in touch.

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