The FCA has today published Consultation Paper CP20/10 on its plans to delay the sweeping new Certification Regime and Conduct Rules (SM&CR) until March 2021.

It will give firms more time to make the changes needed due to the impact of the pandemic.

The FCA is asking for comments on the consultation by 14 August and is consulting alongside the Treasury’s use of a Statutory Instrument in Parliament to delay the changes.

The changes apply to all FCA solo-regulated firms authorised to provide financial services under Financial Services and Markets Act 2000 (FSMA). Appointed Representatives (ARs) will also be included in the extension but the extension proposals do not apply to benchmark administrators.  

The Senior Managers & Certification Regime (SM&CR) is designed to beef up consumer protection and strengthen market integrity.

Before the delay FCA solo-regulated firms were given until 9 December to assess the fitness and propriety of certified staff, submit information about certified and assessed staff for inclusion in the FCA Register and provide training to all other employees, except ancillary staff, on the Conduct Rules.

Under the new regime accountable senior managers must ensure that all Certified Persons are fit and proper. The FCA says that firms should not wait to remove staff who are not fit and proper from certified roles. Accountable Senior Managers must also ensure that Conduct Rules training is effective.

Senior Managers and Certified Persons are already subject to the Conduct Rules and the FCA warned it would hold them accountable for any "misconduct" during and after the pandemic.

Last month the Treasury moved back the deadline by which firms must have first assessed the fitness and propriety of their Certified Staff from December to March.

To ensure other Senior Managers & Certification (SM&CR) deadlines remain consistent the FCA is consulting on extending the deadline for the following changes:

• the date the Conduct Rules come into force
• the deadline for submission of information about Directory Persons to the Register
• changing references in the rules to the deadline for assessing Certified Persons as fit and proper

The FCA has reiterated that if firms can certify staff and submit information about Directory Persons to the Financial Register earlier than March they should do so.

The FCA will still begin publishing details of certified employees from 9 December on the Register where those details have been added.  

Jonathan Davidson, FCA executive director of supervision, retail and authorisations, said: “These proposed changes recognise the exceptional stress placed on financial services firms by the Covid-19 pandemic and the importance for firms to fully and properly implement the Certification Regime and to train staff effectively in the Conduct Rules. 

'We continue to place great importance on the Certification Regime and the Conduct Rules and see this as an opportunity to raise the bar permanently around conduct, competence and culture in the financial services industry."