FCA warns brokers and MGAs to ‘remove’ staff not ready for SM&CR 

The FCA has caused alarm among insurance intermediaries and MGAs by insisting that firms must rid themselves of staff who are not ‘fit and proper’ for roles under the Senior Managers & Certification Regime (SM&CR) which comes into effect on 31 March 2021.

The warning came in a Dear CEO letter on the FCA Supervision Strategy for Lloyd’s & London Market Intermediaries and Managing General Agents (LLMI) issued on 3 November. This outlined the regulator’s views on the risks of harm posed to customers or markets by firms in the FCA’s LLMI Portfolio – and what it expects firms to do to mitigate those risks.

The letter warns that firms now have less than five months to ensure all staff in Certified roles are fit and proper to perform them, with a Senior Manager assigned responsibility for ensuring proper assessments are carried out. 

‘Staff who do not meet fit and proper standards,’ the letter warns, ‘must not be certified, and firms mustn’t assume someone is fit and proper just because the individual has been approved by the FCA or indeed the FSA at some point in the past.’

Concerns have been raised among LLMI firms by the FCA’s insistence that ‘firms should remove staff who are not fit and proper from certified roles’ and that it will be ‘monitoring processes and outcomes and engaging robustly with firms and the relevant Senior Managers.’

However, UKGI managing director Nikki Bennett says firms need not panic. ‘In most cases appropriate training will be all that’s required to ensure that staff in certified roles are ready to be certified fit and proper under SM&CR. 

‘Wherever you’re starting from,’ she says, ‘there is still time to ensure your firms is ready for SM&CR, but this is certainly an area that demands urgent attention. The good news is that our compliance experts and training specialists are ready to help ensure you’ll be fully prepared come 31 March next year.’

To find out more, please call us on 01925 765777, or email us at info@ukgigroup.com.

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