With just over four months to go until the rules take effect, now is a good time to assess how ready asset managers are to meet new standards on operational resilience.
UK asset managers in the scope of the enhanced SMCR regime must comply with the FCA’s operational resilience rules from 31 March 2022. Banks, insurers and the largest investment firms must comply with both the FCA and PRA’s regimes from this date as well.
The good news – as Raza Naeem and Clare Wiles explain in our latest operational resilience podcast – is that the March deadline is not a “hard stop”. For example, records evidencing compliance with the regime do not need to be submitted to the FCA by this date. In fact, the intention is that these become “living and breathing” documents which evolve as the sophistication of firms’ resilience improves over time.
That said, the rules still require those records to be in place and make them available on the regulator’s request after 31 March 2022. This means that in the final months before this deadline, asset managers need to consolidate the work already done on identifying important business services and setting impact tolerances and bring it all together into a self-assessment report which will be signed off by the board. This presents a window of opportunity for asset managers to reassess the legal analysis underpinning the key decisions taken so far.
At this stage and over the next year or so there’s still time to pin down that legal analysis and recalibrate if necessary.