CP18/19: the FCA’s proposal for a new public directory

The FCA consults on the proposal to introduce a new public register for checking the details of key individuals working in financial services.

Context

  • Following the extension of the SMCR, the number of individuals on the Financial Services Register (“Register”) will substantially reduce, as only specified Senior Manager roles at FSMA firms will be required to be approved by the FCA and appear on the Register. Firms will be responsible for certifying the suitability, competence, fitness and propriety of their own people to the FCA.
  • Throughout the consultation process for the SMCR extension, a number of firms expressed concerns about the absence of an FCA register for those individuals who are no longer certified by the FCA (and in relation to whom there would be no FCA mark of approval). In response to these concerns, the FCA is proposing a new Directory of information to be supplied by firms. However, the FCA has not reversed the fundamental concept that it is no longer responsible for approval.
  • Whether the Directory meets those concerns is a question for the consultation process - do firms think that this Directory will have any value to the market?
  • The FCA believes the improved visibility of firms and individuals would:
    • assist customers to locate suitable advisers or check the qualifications and conduct history of their existing adviser, increasing competition and enhancing consumer protection
    • allow firms to assess the suitability of counterparties, and
    • aid the FCA with monitoring and enforcement activities, making it more difficult for unsuitable individuals to operate in the UK financial market.

You can find links to the documents at the bottom of this article.

What is proposed?

  • The FCA proposes to introduce the Directory: a new public register and user interface that will make information public on additional individuals carrying out a wider range of roles (including Certification staff, non-Senior Manager Function Directors (executive and non-executive) and those who the FCA does not approve, such as financial advisers, pensions and mortgage advisers, traders, portfolio managers and additional managers), as well as presenting information on the Senior Managers that the FCA continues to approve.
  • The Directory would include information such as:
    • Workplace location: list of individuals active in specific areas
    • Qualifications: list of individuals who hold appropriate qualifications e.g. to provide mortgage advice
    • Regulatory sanctions and prohibitions: facility to check which individuals are prohibited by the FCA and PRA or have limitations on the activities they are permitted to undertake

What do I need to do?

  • Provide feedback: 05 October 2018 is the deadline to provide the FCA with feedback on this proposal. The FCA aims to publish final rules in the winter. Final system testing would then take place before the FCA would accept notifications from firms.
  • If the FCA introduces the Directory:
    • Provide information: firms would need to provide the FCA with the information outlined above on all Directory Persons who work on their behalf, by the end of an individual’s first business day performing a relevant role. For existing staff, firms would have until the end of the SMCR transition period to certify relevant employees and report to the FCA accordingly.
    • Update information: firms would be responsible for the timely and accurate reporting of this information on an ongoing basis (with a £250 administrative fee for late or inaccurate data).

The FCA and PRA published multiple documents in relation to the extension of SMCR. Please find links to those document below.

FCA Updates

1. PS18/14 - Extending the Senior Managers & Certification Regime to FCA firms - Feedback to CP17/25 and CP17/40, and near-final rules
2. PS18/15 - Extending the Senior Managers & Certification Regime to insurers - Feedback to CP17/26 and CP17/41 and near-final rules
3. PS18/16 - Final Guidance: the Duty of Responsibility for insurers and FCA solo-regulated firms
4. CP18/19 - Introducing the Directory
5. SMCR - Guide for FCA solo-regulated firms

PRA Updates

1. PS 15/18 - Strengthening individual accountability in insurance: Extension of the SM&CR to insurers”


This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.