SUCCESSFUL SENIOR MANAGEMENT APPLICATIONS

Proportion
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The FCA is often criticised for authorising individuals with ‘interesting histories’ and yet, in the same breath, for taking so long to approve applications.

Factual evidence would suggest these criticisms are fair. The FCA should do more to weed out those who do not meet the standards set out in FIT, whilst not delaying applications if Form A is complete and the candidate meets the requirements. However, does the blame lie solely with the FCA? Perhaps not.

The SMCR system is clogged up with poorly or partially completed applications that are inevitably kicked back.

Prepare before you declare

The 24-page Form A is considered by the FCA to be a firm’s evidence of due diligence. It is also the assessment of a candidate’s fitness and propriety for the senior management role.

The declaration on the final page makes it quite clear (to those who read it) that the firm considers the candidate it is putting forward to be ‘fit and proper,’ based on its due diligence.

So, before signing this declaration, it is important to ensure Form A is completed in full and additional information is attached to the application, where required. For example, what checks have been made to confirm the information provided by the candidate is correct?

Top tips

From our experience of reviewing pre-submission SMCR applications and helping those who have become bogged down post-submission, we have drawn up a list of points to consider during the evidence gathering process:

  1. Have you answered ‘no’ to all questions in section 5 (apart from 5.5.03 and 5.5.04)? If you answered ‘yes’ to any of them, has a complete explanation been provided?
  2. Has a standard (not a basic) DBS been completed in the last three months?
  3. Have full regulatory references been received for the last six years?
  4. Is section 6 complete? This is the one place where both candidate and firm can set out their case to the FCA, highlighting why they consider the individual to be appropriately skilled and experienced to perform the senior management role. If this is a step up, what training/induction is planned, how will the handover be completed and what support will be provided?
  5. Why does the candidate complement the firm’s strategy and its governing functions?
  6. Prepare and submit the documents requested in 6.03 with the application. Sending them later will only delay approval due to missing information.
  7. Finally, cross-check all the evidence you have been provided by the candidate, making sure it is corroborated by independent checks the firm has made, such as references, DBS, Companies House and credit checks. Also, Google (other search engines do exist!) the candidate and their previous firms – does it reveal any adverse information?

On the case

The FCA case officer can assess a complete application quickly and without the need to seek additional information. Each time they reach out to firms for extra detail, the clock stops and work on the matter ceases.

This may seem like a lot of unnecessary hassle – after all, it’s the FCA’s role to assess the candidate. However, it is unlikely you’ll be sat waiting for more work when the email arrives giving you 10 working days to provide information that should and could have been included.

For help or advice on completing SMCR applications, don’t hesitate to contact B-Compliant on (0161) 521 8641 or email: [email protected]

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