What is the biggest challenge firms face under SM&CR?

In most cases, the issue is not a lack of documentation, but a lack of alignment between documentation and reality. Responsibilities may be unclear, outdated or not properly understood across the business.

What does the FCA focus on under SM&CR?

The FCA typically looks at clarity of accountability, governance structures, the accuracy of documentation and whether responsibilities are applied in practice.

What are common SM&CR gaps?

Common issues include unclear or overlapping responsibilities, outdated Statements of Responsibilities, weak governance structures and a lack of evidence demonstrating effective oversight.

Do all FCA firms need to comply with SM&CR in the same way?

No. SM&CR applies differently depending on whether your firm is classified as a Limited Scope, Core or Enhanced firm. The level of documentation, governance complexity and reporting requirements increases depending on your firm type, but all firms must clearly demonstrate accountability and oversight.

What makes a good Management Responsibility Map?

A good Responsibility Map clearly shows how governance works in practice. It should set out reporting lines, key responsibilities and how decisions are made, without being overly complex. The FCA expects it to be clear, consistent and aligned with Statements of Responsibilities.

Do we need to re-certify staff every year?

Yes. The Certification Regime requires firms to assess the fitness and propriety of certified staff at least annually. This should be a structured process, supported by evidence, rather than a tick-box exercise.

How do we identify a Conduct Rules breach?

A Conduct Rules breach occurs where an individual fails to meet the expected standards of behaviour. Firms need clear internal processes to identify, assess and escalate potential breaches, including determining whether they are reportable to the FCA.

SM&CR Support

SM&CR is ultimately about one core question: who is responsible for what, and can you evidence it?

The FCA Senior Managers & Certification Regime (SM&CR) requires firms to clearly define individual accountability, maintain effective governance structures and demonstrate that senior management oversight operates in practice. While most firms have documentation in place, the challenge is ensuring it accurately reflects how the business runs.

We support FCA-regulated firms in building and maintaining SM&CR frameworks that are clear, credible and capable of standing up to regulatory scrutiny. This includes helping firms both during FCA authorisation, where governance and accountability must be clearly evidenced from the outset, and on an ongoing basis as structures evolve and regulatory expectations develop.

Contact us to discuss your compliance requirements and how we can support your firm.

CONTACT US

Designing Your SM&CR Framework

A common issue under SM&CR is that responsibilities exist on paper but are not clearly understood or applied in practice. This often leads to gaps, overlaps or uncertainty around accountability.

We work with firms to design governance frameworks that clearly show how responsibility flows through the business.

This includes:

Identifying Senior Manager Functions (SMFs)
Allocating Prescribed Responsibilities
Structuring reporting lines and oversight
Defining escalation and decision-making processes
Preparing Statements of Responsibilities (SoRs)
Developing Management Responsibility Maps (MRMs)

The focus is not just on producing documentation, but on ensuring it accurately reflects how the firm operates day-to-day.

Making Accountability Work in Practice

SM&CR frameworks tend to break down where accountability is unclear or not properly embedded. In many cases, firms have formal structures in place, but responsibilities are not consistently understood across senior management or applied in decision-making.

We support firms in reviewing how accountability operates in practice. This includes assessing whether responsibilities align with actual roles, identifying gaps or overlaps in ownership, and reviewing how decisions are made, challenged and recorded. We also look at the effectiveness of governance forums and whether senior management oversight is meaningful and evidenced.

The objective is to make accountability visible and defensible, rather than assumed.

Certification Regime & Fitness and Propriety

The Certification Regime is often where firms experience the most operational friction.

We support firms in implementing certification frameworks that are structured but workable, including:

Identifying certification roles
Designing proportionate assessment processes
Supporting annual fitness and propriety reviews
Aligning certification with existing HR processes
Reviewing records and evidence

Recent FCA updates allow firms to take a more flexible approach where appropriate, but the expectation remains that assessments are robust and evidenced.

Conduct Rules & Behavioural Standards

SM&CR is not just structural. It also requires firms to set and enforce clear behavioural standards.

We support firms in ensuring Conduct Rules are properly applied, including:

Implementing Conduct Rules frameworks
Supporting staff training and awareness
Reviewing breach identification and escalation
Advising on reporting obligations

The focus is on ensuring Conduct Rules are applied consistently, not just acknowledged.

Maintaining Your SM&CR Framework

SM&CR is not a one-off exercise. As firms grow, restructure or change direction, governance arrangements and responsibilities must be reviewed to ensure they remain appropriate.

We support firms on an ongoing basis to maintain and strengthen their SM&CR frameworks. This includes updating Statements of Responsibilities and Responsibility Maps, reviewing governance following structural changes and assessing whether accountability remains clear across the business. We also support firms in preparing for FCA engagement, ensuring they can clearly explain and evidence how their framework operates.

SM&CR Support for FCA Authorisation & Change

SM&CR plays a central role in FCA authorisation and regulatory approvals. The quality of governance design and accountability mapping is often a key factor in how applications are assessed.

We support firms with SMF applications, preparation for FCA interviews and the design of governance structures for new businesses. We also assist with Variations of Permission and support firms in reviewing and updating SM&CR arrangements following changes to their business model or structure.

A clear and well-structured SM&CR framework can significantly reduce delays and follow-up queries from the FCA.

Support for New and Established Firms

We provide SM&CR support a wide range of FCA-regulated firms, including:

Consumer and wholesale investment firms, including advisers and asset managers
Insurance firms, including insurance brokers and managing general agents (MGAs)
Payments and e-money firms
Consumer credit firms
Cryptoasset firms
Fintech firms and startups

Our work is always tailored to how your firm is structured, how decisions are made and where accountability sits in practice.

Frequently Asked Questions

FCA SM&CR Support

Speak to Us About SM&CR Support

SM&CR is one of the FCA’s primary tools for assessing governance and accountability. Firms are expected to clearly demonstrate who is responsible for each area of the business, how decisions are made and how oversight is exercised.

If your SM&CR framework needs to be implemented, reviewed or strengthened, we can help.

Contact us to discuss your requirements and how we can support your firm.

info@complianceangle.co.uk