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Governance, SMCR & Consumer Duty Enforcement

Post the July 2023 deadline for the Financial Conduct Authority (FCA) Consumer Duty, all Senior Managers at firms should be mindful of their obligations and anticipate the potential greater enforcement activity against them – What should Senior Managers do to limit their possible liabilities and how can Danos Consulting help?

The Code of Conduct (COCON) requires every Senior Manager to take reasonable steps to ensure that the business of the firm for which they are responsible:

  • is controlled effectively.
  • complies with the relevant requirements and standards of the regulatory system.

The required standard for compliance will be raised further when the new Consumer Duty Individual Conduct Rule 6 comes into force, specifically COCON 2.1.6 that requires that Senior Managers must act to deliver good outcomes for retail customers.

The aims of COCON include holding Approved Persons to account for the general mismanagement of authorised firms, which is accepted to apply individually and collectively across senior management.  It is not necessarily just limited to their direct responsibilities set out in their Statement of Responsibilities.

All Senior Manager exercising a governing function will almost certainly need to go further in order to be able to demonstrate that they:

  • have an objectively reasonable basis for believing that other Senior Managers within the firm are both capable of, and are in fact, running the sections for which they have responsibility in a compliant manner; and
  • have taken steps to ensure that they are informed about the firm’s business and have challenged the conduct of that business.

Senior Managers should adopt a proactive approach in discharging their general duties of governance and oversight.  If nothing else, Rule 6 will require all Senior Managers to be able to evidence:

  • that they have reasonable grounds to believe that all areas of their firm are controlled effectively and in a manner that is consistent with regulatory requirements; and
  • if not, that they have taken reasonable steps to challenge and correct any deficiencies.

How Can We Help?

Danos Consulting is a specialist resourcing and consultancy firm for leading organisations across Financial Services. We have an excellent track record for delivering flexible compliance solutions. Whether that is providing resources to augment project delivery or delivering a programme of work from impact assessments to identify key gaps, to undertaking in-depth actions to provide assurance.

If you would like to discuss this further, please contact Gurjit Purewal who will be very happy to advise on the right solutions to ensure you are meeting your regulatory responsibilities.

Gurjit Purewal | Danos Consulting
E: | T: +44 (0) 20 7610 6442