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Grandfathering grumbles - PRA and FCA highlight failings in S(I)MR

03 February 2016

In the past few days both the PRA and FCA have reminded banks and insurers of the 8 February deadline for the submission of grandfathering notifications for individuals to perform roles under the Senior Managers Regime and the Senior Insurance Managers Regime.

As well as reminding firms of the deadline for the submission of their Form K grandfathering notifications, both regulators highlighted some of the more practical issues concerning the electronic completion of the forms and the delivery of these forms to the regulators.

Significantly both the PRA and the FCA also commented on deficiencies in forms that had already been submitted to them. In particular the PRA commented that "experience to date shows that some firms are having to resubmit their applications where they have not allocated the prescribed responsibilities and/or mandatory functions." The PRA added that "this results in rework for firms". However it did not clarify whether an individual will be validly grandfathered if their form is submitted before the 8 February deadline but is subsequently deemed to require "re work".  Instead the PRA, along with the FCA, simply advised firms to "check your notification thoroughly before submitting".

Whilst the feedback from the regulators does not provide a detailed insight into the nature of the errors by banks and insurers that have to re-submit these notifications, it does serve as a timely reminder of the challenging nature of this process.   In the light of that, firms encountering difficulties would be well advised to contact the regulators immediately if they fear that they too might be in danger of submitting inadequate notifications.  Indeed the PRA and FCA noted that "It continues to be important that the PRA and FCA understand any issues affecting the ability to make a submission."