Earlier this week, the watchdog announced it was extending the scope of its Senior Managers and Certification Regime (SMCR) that currently applies to banks to cover all financial advisers and asset managers.
The FCA’s plan is to ensure named individuals can be held directly responsible for the key activities and actions of a financial practice, regardless of size.
Aimed at the reckless and criminal
SimplyBiz Group said the proposed new rules would be warmly welcomed by the vast majority of “conscientious and responsible” firms and advisers, as they have nothing to fear from these new regulations.
Group chairman Ken Davy said: “SMCR is aimed particularly at the reckless and criminal advisers who have so often created liabilities for the Financial Services Compensation Scheme and then walked away scot-free, leaving the well-run firms to pick up those liabilities.
“A real benefit of the SMCR is that it should also become much more difficult for the small minority of firms and individuals who behave in a reckless or criminal manner to simply ‘phoenix’ in a new guise without suffering any repercussions for their previous poor behaviour.”
Davy added, however, that he is mindful that the introduction of wide scale regulatory change brings its own challenges.
“We therefore believe that care will be required to ensure the new regulations do not stifle innovation and reduce confidence in decision making within advice firms.”