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Senior Managers & Certification Regime guidance updated
We have updated our guidance to reflect new requirements from the PRA and also to provide an example template for the issuing of Certificates under the new Certification regime.
Climate change
On 15 April 2019, the PRA published Policy Statement PS11/19 (and its appended Supervisory Statement SS3/19) on managing the financial risks from climate change. The SS states that the board and the highest level of executive management should identify and allocate responsibility for identifying and managing financial risks from climate change to the relevant existing Senior Management Function(s) (SMF(s)) most appropriate within the firm’s organisational structure and risk profile, and ensure that these responsibilities are included in the SMF(s)’s Statement of Responsibilities.
The PRA expects the SMF(s) to be responsible initially for ensuring there is a plan in place to address and implement the expectations in the SS. However, the SMF holder(s) will not immediately be held accountable for meeting all expectations. The PRA expects to see the expertise of the assigned SMF(s) develop over time. To ensure SMFs are in place and are able to manage firms’ responses to the SS, firms should have identified the individual(s) and notified the PRA using Form J by Tuesday 15 October 2019. By this point, the PRA expects firms to have a plan in place to meet the expectations in the SS.
The PRA has no plans at this time to make climate change a ‘prescribed responsibility’.
Certification regime
The new Certification regime will come into force on 10 December 2019. Managing agents will be required to issue certificates each year to individuals in certain roles to show that the managing agent is satisfied that the individual is fit and proper to perform that role, or where a certificate is not provided, what steps the firm proposes to take in relation to the person as a result of the decision.
The LMA has put together an example Certificate template which has been shared with the FCA. The template can be found in Appendix 3 of the guidance.
Steve Morrell
Head of Regulatory Affairs
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