On 28 October 2020, the Financial Conduct Authority (FCA) published a policy statement titled 20/12: Extending the implementation deadlines for the Certification Regime and Conduct Rules (PS20/12). PS20/20 summarises the feedback received from its consultation on extending the implementation deadlines for the Senior Managers & Certification Regime and Conduct Rules as well as outlining its finalised rules for the extended guideline.
Overview of PS20/20
Following a request from the FCA, the Treasury has made a statutory instrument to delay the deadline for solo-regulated firms to undertake their first assessment of the fitness and propriety of their Certified staff from 9 December 2020 until 31 March 2021.
The FCA had also consulted to change to the same date, the deadline for certification in the FCA Handbook and give corresponding extensions to the deadline for training staff on the Conduct Rules and reporting Directory Person data.
While the FCA encourages all firms to meet the original deadline of 9 December 2020 wherever possible, solo-regulated firms (except benchmark administrators) will have until 31 March 2021 to have fully implemented the Senior Managers & Certification Regime, Conduct Rules and reported information on Directory Persons.
The FCA proposed to extend these deadlines to give firms significantly affected by the coronavirus pandemic (COVID-19) time to fully and properly implement the Senior Managers & Certification Regime and to train staff effectively on the Conduct Rules. In doing so, the FCA has reiterated the importance of these noting that: “Our aim is to avoid firms having to choose between meeting their regulatory deadlines and realising their plans to achieve a full and effective implementation of the Senior Managers & Certification Regime and Conduct Rules. We want to support firms to make lasting changes to their governance, culture, conduct and capability”.
Who do these changes apply to?
These changes affect all FCA solo-regulated firms authorised to provide financial services under the Financial Services and Markets Act 2000. Appointed Representatives are also in scope of the extension to the reporting deadline for Directory Persons. However, it should be noted that these changes do not apply to benchmark administrators.
Finalised rules
In summary, PS20/20 confirms that the deadline for the following requirements will be extended from 9 December 2020 to 31 March 2021:
- the date the Conduct Rules come into force, for staff who are not Senior Managers, Certification Staff or board directors;
- the date by which relevant employees must have received training on the Conduct Rules (this automatically follows from the extension in the previous bullet point); and
- the deadline for submission of information about Directory Persons to the Register references in our rules to the statutory deadline for assessing Certified Persons as fit and proper following agreement with the Treasury.
The FCA is also extending the implementation deadlines for Claims Management Companies (CMC) by an equivalent period. This means that a CMC receiving full authorisation on or after 9 December 2019 will have just over 15 months after the date of its full authorisation to meet the requirements mentioned above.
Extending the implementation deadlines
The FCA notes that while it recognises that uncertainty around COVID-19 may persist in the future, it has nevertheless stated that the extension until the 31 March 2021 should give all firms sufficient time to implement the Senior Managers & Certification Regime and Conduct Rules. In this regard, no further extension will be made available.
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