There are fewer than 100 days left until the Senior Managers & Certification Regime (SM&CR) extends to all regulated firms, including those within the motor industry, and senior leaders need to ensure they are ready for the changes ahead, according to MotoNovo Finance deputy chief executive officer Karl Werner.
He argues that while an increasing focus has been given over to the Financial Conduct Authority’s review of motor finance, only limited reference has been given to the escalating regulatory scrutiny of almost all regulated firms by the introduction of SM&CR.
It is due to be implemented in the consumer credit sector on December 9 and will replace the current Approved Persons regime.
SM&CR aims to increase the personal accountability of everyone working in financial services, particularly those in senior roles and includes motor dealers offering finance.
All dealers offering finance must have an Approved Person who will need to transfer to the new Senior Management Function (SMF) structure under SM&CR.
As well as some important validation steps laid out on the FCA’s website, dealers should ensure they have robust processes and controls in place.
Werner said: “SM&CR perfectly complements the findings from the FCA review. All these changes are built around encouraging a more sustainable industry; one in which the customer is empowered and experiences a journey that’s simple and familiar. SM&CR embodies the principles of good conduct and a culture that is set up to ‘do the right thing’ for customers.
“What every firm needs to establish and sustain is a culture that empowers and protects customers. We are encouraging all dealers to act now and are offering guidance to help dealers start thinking about next steps, but this is not something we can do for them.”
He added that in other sectors of financial services already affected by SM&CR, there have been personal fines, while there is also potential for custodial sentences.
“Now is the time for dealers to get on-board with the necessary changes,” he added.