The Financial Conduct Authority thinks that its individual accountability regime should be extended to the payments and e-money sector.
Where the Senior Managers and Certification Regime applies, it sets minimum standards of behaviour for practically all employees. There are additional conduct rules for individuals performing the most senior roles who must be approved by the FCA and have a statement of responsibilities setting out what they are responsible for. Firms must also certify that individuals performing other specified functions are fit and proper to perform their role.
SMCR currently applies to entities authorised under the Financial Services and Markets Act. To date, this has meant that payment institutions and e-money institutions – which are authorised under the Payment Services Regulations and Electronic Money Regulations respectively – have not had to apply SMCR.
This, however, is likely to change. In its latest Perimeter Report, which recommends where the regulatory line should be (re)drawn, the FCA says that it “sees value” in extending SMCR to these firms. If the Treasury agrees, the next step would be for it to consult on how SMCR should apply to payments and e-money firms and then draft legislation.
Treasury has already suggested introducing a version of SMCR for payment systems.
January 2022 update:listen to our payments podcast.
For more insight on what the SMCR would mean for payments firms,