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Senior Managers and Certification Scheme: Extension to Financial Conduct

Volume 663: debated on Thursday 18 July 2019

Today the Bank of England and Financial Services Act 2016 (Commencement No. 6 and Transitional Provisions) Regulations 2019 (SI 2019/1136 C. 35) are published.

In my Written Ministerial Statement of 3 July 2018 [HCWS823] I announced that the senior managers and certification regime would come into force for financial services firms regulated by the Financial Conduct Authority only—also known as solo-regulated firms—from 9 December 2019.I would like to update the House that, in these regulations, there will be two exceptions to the commencement date, for newer categories of solo regulated firms.

The first are benchmark administrators. This is a new category of authorised firm introduced by the EU benchmark regulation, which came into force on January 1 2018. The benchmark regulations included a transitional period such that these firms have until the end of 2019 to become FCA authorised. The SM&CR will commence for benchmark administrators on 7 December 2020 to allow the FCA to carry out a dedicated consultation for benchmark administrators before making final rules for the sector.

The second are claims management companies (CMCs). The Government have already legislated to bring CMCs within the FCA’s regulation, and applications for authorisation are currently being considered by the FCA. Firms awaiting full authorisation, but previously regulated by the Ministry of Justice will have temporary permission to operate. Not all CMCs will have gained full authorisation by December 9 this year, so the commencement regulations confirm that the SM&CR begins for these firms on December 9 this year, or at the date at which they receive full authorisation if this is later.