FCA “APOLOGISE” FOR SMF APPROVAL DELAYS

From connect log ins…letter from FCA posted on 1st September to all firms….

“We communicated in December 2020 about the delays in determining SMR (Senior Manager Regime) and SIF (Significant Influence Function) applications, following the very large volume of applications received n the run up to the extension of the Senior Managers and Certification Regime (SM&CR).

We increased resourcing to address the delays and made good progress in determining the majority of applications which had breached their statutory deadline and reducing the allocation times for applications.

However, in Q1 2021 we received significantly higher volumes of applications than forecast.  Combined with capacity lost due to the impact of the pandemic and lockdown, this has meant we were not been able to bring our case volumes and allocation times back to business as usual levels by the end of the financial year as we had planned.

Therefore applicants may still experience delays while we further increase resources to reduce the volume of applications in progress and awaiting allocation.  

Applications to hold a Controlled Function at an Appointed Representative that are non-routine are dealt with by the same teams as handle Senior Manager applications. Because information about such candidates will be examined in detail, these also take longer to determine. Firms submitting candidates who either have been or intend to become involved with the provision of advice on defined benefit pension transfer, for example, should also expect such applications to take longer to be determined.

You can help us to determine your application as quickly as possible by:

• Ensuring that you carefully check the application before submission to ensure that it has been completed in full;
• Remembering that for SMR applications you must complete a Disclosure & Barring Service (DBS) check before submission;
• Making sure you have conducted all appropriate due diligence checks, including regulatory references, before submitting a candidate and that you include details of those checks with your application;
• Responding promptly and fully if we contact you to seek further information with regard to an application submitted.

Routine applications to be approved to hold a Controlled Function at Appointed Representatives may also take longer to be determined than our voluntary service standard of five working days, as we have received a significant increase in these applications in 2021, compared to the same period in 2020.”

IFAC note that this is close to an apology.  Is it really true that our "be very afraid" regulator is holding its own hand up?  Is there a welcome change of tone at the top, where humility is the first step towards change?  Having wrapped us all up in red tape, it is quite something to see that the machine is strangling with its own procedures.   Assuming the best, that this is a request for some forgiveness then we can grant that much and lay off for now.   Or maybe not. 

There is no reference to q2 or q3 2021 at all.  So while we like to be glass half full, we fear that time delays are presumably only getting worse and there will be more apologies to follow.  And while they struggle to cope with their own rules and procedures, why not change them?  Is it too much to say "adapt to survive?"  After all the SMF regime squarely puts the principal firm and senior managers at fault for error, so why are the FCA double checking AR applications? 

IFAC ask for more responsibility to be given to the SMF role players.  Concentrate on them, and free up the AR regime.