Key takeaways:

• Effective since 2016 for UK banks and other PRA-designated investment firms, the Senior Managers and Certification Regime (SM&CR) will apply to all remaining UK-regulated firms from December 2019, including private fund managers and advisers.
• Firms will need to designate “Senior Managers”, who will take responsibility for all aspects of a firm’s regulated business and will be accountable to the regulator for rule breaches.
• The current Approved Persons regime will be replaced by a certification system, applicable to individuals who are not Senior Managers but whose role means they have the capacity to cause “serious harm” to the firm or its clients. The firm itself, and not the regulator, will have to certify that each such person has the competency and the integrity required to perform their function.
• Firms moving to the new regime this year will benefit from some grandfathering, making it unnecessary for Approved Persons who become Senior Managers to be reapproved by the FCA.