Fail to prepare, prepare to fail!
The extension of the Senior Managers and Certification Regime (SMCR) is set to have a significant impact on the asset management industry. The deadline for implementing the new regime is expected to be confirmed imminently but there’s plenty that asset managers can do now to prepare for implementation, to clarify and rationalise their existing governance arrangements.
At our last asset management SMCR roundtable discussion, it was largely agreed that SMCR is an important and demanding topic with significant implications for the sector. However, there are three main challenges in implementing the new regime:
Senior managers will need the most support in taking and evidencing ‘reasonable steps’ under the proposed duty of responsibility, particularly in the following areas:
It’s understandable that many in the asset management industry are concerned about what SMCR means and how best to respond. There’s still a lack of clarity about elements of the new regime and a great deal of work to be done, particularly in formalising the internal policies and procedures to enable the regime to operate properly.
KPMG has already worked with numerous financial services firms on the implementation of SMCR over the past four years. We have a solid understanding of what asset managers should be doing and when, plus how the new regime can be a catalyst for clarifying opaque responsibility allocations, simplifying complex matrix management structures and optimising management time.
In the run-up to the implementation of the SMCR for banking firms we saw that unsurprisingly the most proactive and early-engaging firms were better equipped for the go-live date and better informed to address any subsequent regulatory scrutiny. This is one of the most valuable lessons we can learn as an industry when implementing SMCR.
Please get in touch if you would like to discuss how we can help your firm with the implementation of SMCR or if you would like to be kept informed of future asset management SMCR roundtables.