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The FCA has big expectations, are you ready?

The Financial Conduct Authority (FCA) have signalled that they are not pleased with the embedding of the Senior Managers and Certification Regime (SM&CR). In particular the understanding and application of the Conduct Rules, which set ‘basic standards of good personal conduct’, against which the FCA can hold people to account.

They have called out concerns about the quality of training and clearly expect financial service providers who came under the regime in the latter phases, to learn the lessons from an initial stocktake report conducted into banking.

To ensure that your business is ‘audit-ready’, there are three questions L&D teams should be asking now:

1. Are we clear on the requirements for Conduct Rules training?

The Conduct Rules apply to all employees (excluding ancillary staff) and firms are required under the Financial Services Market Act (FSMA) to train relevant staff on how Conduct Rules apply to their role.

While training had been rolled out on the Conduct Rules, the FCA found that most staff had only a generic understanding. They were not satisfied with the quality of training, stating that there should be more tailoring to ensure staff understand how the rules apply in their job roles and influence their day-to-day activities.

2. How can we ensure staff understand how the conduct rules apply specifically to them in their roles?

It’s not rocket science but, in our experience, people learn best through short and high impact training programmes designed and delivered by subject experts that use:

  • Storytelling to make it memorable
  • Company specific examples articulated by your managers
  • Relevant case studies, examples to make it actionable
  • Exercises and discussion to ensure it is clear, engaging and relevant
  • A safe space to speak up and seek clarification
  • Action planning to help embed the learning

Take Conduct Rule #1: You must act with integrity as an example, the key is to move beyond a conceptual understanding of integrity so that people understand how it relates to the everyday actions they take in their roles.

3. Do your Senior Managers have the depth of management skills to delegate, oversee and control their assigned responsibilities effectively?

The Senior Manager Conduct Rules cover good management skills including effective delegation, effective oversight and accountability, which all help support a healthy culture.

While most banks had made progress in putting processes in place to oversee the certification population, these were not viewed as fully embedded in the existing performance assessments: “it is not clear that firms are using the Certification Regime to evaluate if managers of certification staff (who are themselves certified) are competent managers.”

The FCA are concerned that not enough weight and importance has been ascribed to the management skills required to fully implement the regime.

Our short, high impact management training programmes can support your managers to develop the skills and competency required for the implementation of the regime. See our relevant courses here.

 How will you succeed?

When you receive a visit from the FCA you want to be able to demonstrate you have listened to the key lessons learnt in the review and implemented high quality training which gives:

  • your staff an awareness and broad understanding of all of the rules
  • your staff a deeper understanding of the practical application of the specific rules relevant to their work
  • your managers the skills required to manage effectively

If you are the assigned Senior Manager accountable for the regime at your firm, you will need to demonstrate how you have satisfied yourself that effective training has been carried out and each staff member can confidently answer questions from the regulator.

The BiteSize Learning approach

At Bitesize Learning our approach reflects our expertise in organisational development and culture, which will support you to embed the right behaviours as expected by the regulators. Our regulatory specialists will be happy to help you address the FCA expectations, if you would like to have a conversation about how this could work please give us a call or how we can help, contact us on [email protected]

For details of the SM&CR training programmes we offer, please see here.


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