Senior Manager & Christmas Regime by Lewis Atkinson

If you thought that SM&CR has affected just the financial services industry, think again. I just received a letter this week from the big man in the North Pole. Funny how Santa thinks he could just ignore all my letters as a small child, but as soon as a new regime comes around he comes crawling back.

Anyway, I thought I’d give Mr Claus the rundown of all the changes he should have made and all the things that will affect him and the whole operation in the Grotto from 9th December 2019.

First of all, Mr Claus used to hold the old Director Function, also known as CF1. He’s the big cheese at the Grotto and calls the shots, including who’s on the naughty and nice list (I’m the latter, right?).

Not only did Santa hold CF1, he also held CF10 which was the Compliance Oversight Function. Santa was solely responsible for ensuring that all toys were made to the Regulations and Fun guidance set out by the ‘its Finally Christmas Association’, also known as the FCA.

The final function that Santa held was the CF30, or the Customer Function. Mr Claus needed this as his role involved visiting and dealing with clients, despite this only being once a year and being mainly office based. Mrs Claus held CF2, the Non-Executive Director Function.

Believe it or not, crime is rife in the North Pole, it’s not everything you see in the films. There’s plenty of bad elves in the North Pole who try to hide their criminally earned money by investing with the Grotto. That’s where Santa’s Top Boy comes in, the Head Elf. He held the CF11, or the Money Laundering Reporting Function. His job is to ensure the bad elves don’t succeed in their task of hiding their dodgy cash in the Grotto and instead send them on a one way trip to the South Pole.

So its Senior Manager and Christmas Regime morning which all kids know is the 9th December, but what’s really changed? Did your stocking get filled with the FCA handbook? Here’s what’s changed to the Controlled Functions we just talked about:

Santa

CF1 –> SMF3
CF10 –> SMF16
CF30 –> No longer exists

Mrs Claus

CF2 –> No longer exists

Head Elf

CF11 –> SMF17

All existing Controlled Functions should automatically grandfather over to the new Directory. Mr Claus will now hold SMF1 (Chief Executive Function) and SMF16 (Compliance Oversight Function). His CF30 function will no longer exist under SM&CR. Mrs Claus will no longer hold the CF2, this has also been removed. The Head Elf will move from CF11, to SMF17 (Money Laundering Reporting Function), so he can carry on preventing crime, a bit like batman, but an elf… elfman?

Each of the SMF’s above should have submitted a ‘Statement of Responsibility’ to the FCA before the 9th of December, which does what it says on the tin, states their specific responsibility. Not only this, one of the following ‘Prescribed Responsibilities’ must be assigned to a Senior Elf in the Grotto:

(a) Performance by the firm of its obligations under the Senior Managers Regime, including implementation and oversight.

(b) Performance by the firm of its obligations under the Certification Regime.

(b-1) Performance by the firm of its obligations in respect of its notifications and training of the Conduct Rules.

(d) Responsibility for the firm’s policies and procedures for countering risk that the firm might be used to further financial crime.

The second Prescribed Responsibility gives this person the ability and responsibility to Certify staff members. Being assessed and signed off as fit to do your role is no longer the responsibility of the FCA, it’s now the firm’s responsibility to ensure their staff are competent in every way to complete their role.

This leads me onto another big change which is the role of ‘Certified Functions’. These are typically any of Santa’s employees which could have a material effect on any of his clients. Santa’s Certified Functions would be the Elves, with their hand in making all the toys, and the Reindeer, for ruining people’s rooves whilst delivering presents. These Certified Functions need to be assessed as ‘Fit and Proper’ by that person who holds Prescribed Responsibility B and have a variety of annual checks and assessments done to ensure they are suitable for their roles in the Grotto. The checks include credit checks to assess financial soundness – turns out Santa still hasn’t repaid the loan he took out in 1927 for his new sleigh.

Don’t bother checking to see if any of the SMF’s or Certified Functions are on the Finally Christmas Association register though, this is being replaced by a new Directory and should be live in 2020. As of now, the register has been frozen and will no longer be updated until the new directory comes in.

One last thing to mention is Conduct Rules training. All Certified Functions and Senior Managers should have received training on the rules before the 9th December 2019, and all other staff before 9th December 2020.

Not everything is covered here, but it’s a general outline of the major changes happening with SM&CR. All that’s left to say is have a merry Christmas and a happy new year!

Menu