Managing SM&CR during the Coronavirus crisis

This blog considers the challenges caused by CV-19 in relation to the governance and SM&CR compliance of regulated firms in the UK.

Although we are all finding ourselves stretched at the moment, both at home and in our working lives, and health and wellbeing is the first priority, it is worth considering the implications of the current circumstances on your firm's governance and compliance with SM&CR. Despite the unprecedented circumstances, failure to consider and address these implications potentially risks attracting regulator criticism later down the line.

At this time, your firm might be dealing with, amongst other things:

• staff absences as a result of illness or furlough and the inevitable consequences of fewer people working in the business;



• reduced work capacity due to caring responsibilities. See also our blog on the identification of your firms' key workers; and


• adapting to new ways of working and working though the limitations of systems used in your business.
  

Below we set out some questions to consider when addressing the implications of staff absences, reduced capacities and systems limitations on your firm's governance and compliance with SM&CR.

1. Responsibilities / functions 

• Do the functions and responsibilities of your Senior Managers and/or Certified Persons need to be redistributed?


• Note that the functions of a senior manager can be covered by a non-approved individual for up to 12 weeks (see SUP10C.3.13R 'the twelve week rule').  So far, we are not aware of any move within the regulator to extend this period in the current situation. 

2. Reporting lines / escalation procedures

• Do reporting lines / escalation procedures need to be amended?  


• For example, if a certain member of staff in a reporting line is unwell or even furloughed, do other members of staff know how to handle this and report to the next person in the chain of reporting?Does the next person in the reporting line have the capacity to deal with the extra workload?
  

3. Information / documentation / records

• Do your Senior Managers have access to all of the information, including management information, that they need to carry out their functions effectively?


• Does any governance documentation (for example responsibilities maps and job descriptions) need to be amended? 


• Are records being kept/updated? Ensure that persons with new responsibilities/functions know to keep appropriate records.

4. Handover: If possible, has a handover been effected?

5. Fit and proper / training: 

• Do any new temporary senior managers or certified persons need to be assessed internally as fit and proper (consider CRB checks too)?


• Is any training required for persons with new responsibilities/functions?


• How will that training be delivered in the new working environment?