Senior managers and individuals with Senior Management Functions play a vital role in a financial firm. These positions require individuals who can demonstrate propriety, competency and integrity, which supports transparency and good practice for stakeholders and investors alike.
There are also individuals within any firm who have varying levels of responsibility. The FCA’s Certification Regime aims to reinforce trust and transparency in financial services. This regime encompasses a wide range of roles within the industry, extending beyond senior management to include any individual performing a role with the potential to impact customers, the firm and/or market integrity. The aim is to ensure that everyone, from traders to client-facing teams comply with stringent standards of professionalism.
Key Elements of the Certification Regime
Assessment of Competence
Under the Certification Regime, financial institutions are required to assess the competence of individuals occupying functions deemed to have the ability to cause ‘significant harm’. This involves evaluating their knowledge, skills, and qualifications to ensure they are fit for their roles. This scrutiny extends beyond the initial hiring process, with periodic assessments to guarantee ongoing competence.
Conduct Rules
In addition to competence, the Certification Regime places a strong emphasis on ethical behaviour. Financial services professionals are expected to adhere to a set of conduct rules, which include acting with integrity, putting customers' interests first, and avoiding conflicts of interest.
Senior Management Responsibilities
While the focus here is on the Certification Regime, it is important to note that senior managers also play a significant role in overseeing the certification process and ensuring its effectiveness. They are responsible for implementing and monitoring the regime within their organisations.
Screening for Certification Regime
Using the FCA’s handbook as guidance, regulated firms should be following the framework which encourages them to continually assess and confirm their teams’ propriety and ability to carry out their responsibilities. This proactive approach to employee evaluation not only helps maintain consistent regulatory compliance but also creates a culture of accountability and professionalism within the organisation.
The FCA recommends conducting annual screenings for such personnel as a minimum requirement.
By regularly reviewing and verifying the standing of their workforce, firms can also reduce the risk of misconduct. This commitment to due diligence not only safeguards the firm's reputation but also contributes to the overall stability and transparency of the financial industry as a whole.
Screening employees on a continuous basis can be onerous given the administrative documentation and time involved. FeMan Consulting provides specialised outsourced screening services. We have extensive experience working with funds and have the necessary resources to help you evaluate the suitability of your employees, ensuring strict adherence to FCA recommendations and regulations. We can provide you with guidance based on our experience, and we recognise that the screening process can be demanding and time-intensive. If your firm requires assistance, we can help.