UK asset managers will not have comply with a stringent new personal accountability regime until mid-2019 at the earliest, the local regulator has indicated.
The announcement from the Financial Conduct Authority gives welcome breathing space to asset managers as they grapple with a host of regulatory priorities, such as Mifid II and General Data Protection Regulation.
The extension of the UK’s senior managers and certification regime from banks to asset managers was expected to take effect next year.
However, publishing a new set of proposals detailing SMCR yesterday, the FCA says it “assume[s] that the rules will apply to [asset managers] in mid-to-late 2019”.
It adds that a final decision will be taken by the UK Treasury, which will set the actual implementation date “in due course”.
Emma Cleveland, managing director at legal advisory business Cleveland & Co, says the FCA’s indication that asset managers will have more time to prepare for SMCR will be met with “relief” from the industry.
Ms Cleveland adds: “There over 70,000 firms impacted by SMCR, many of which are currently inundated with Mifid II and GDPR preparations.”
Mifid II will be introduced at the start of 2018, while GDPR takes effect in May.
“Firms need to be given sufficient time to implement the changes and roll out training, and [this announcement] indicates that the FCA has sympathy with this,” says Ms Cleveland.
The FCA says it wants firms to “focus on embedding the cultural changes that the new regime introduces and making sure their staff know what they need to do” between now and the implementation deadline.
The watchdog also yesterday provided more detail on the duty of responsibility for a particular business area that would apply to asset management executives under the new regime.
The FCA says it will be able to take action against the executive responsible in cases where there is a contravention of a relevant requirement by a firm, but adds that the burden of proof will be on the regulator to show that the senior manager did not take reasonable steps to avoid the firm’s breach occurring or continuing.
The FCA will consult on its proposals on the duty of responsibility until 21 February.