23 May, 2022
StarCompliance’s Individual Accountability Regime and Training & Competency solutions help UK firms manage SMCR compliance through automation Senior Managers and Certification Regime (SMCR) compliance is changing, thanks to the Financial Conduct Authority’s new business plan, which takes a more proactive approach to regulation. FCA CEO Nikhil Rathi has warned firms of a tougher approach going forward as it shifts toward becoming a more data-oriented regulator. The FCA is now utilizing data sets to discover market manipulation and other anomalies more quickly. While no firm would ever willingly wade into noncompliance, it’s more important than ever that companies have holistic, measured approaches to ensure compliance down the hierarchy. Regulatory compliance will soon involve proactively detecting potential bad actors before they have a chance to cause further harm. Being able to share this data, both internally and with regulators, should be included in any scheme to manage SMCR compliance. THE BENEFITS OF A DEDICATED SMCR SOLUTION Facilitating this capability requires a dedicated SMCR solution: one that reduces the risks of regulatory intervention and fines through transparent and trackable workflows. Enter Star’s Individual Accountability Regime (IAR) and Training & Competency (T&C) compliance software solutions, which allow firms to manage SMCR compliance through technology that automates and optimizes critical compliance processes: processes that can no longer be reliably handled manually. 1. RISK REDUCTION AND ASSURANCE One 2020 survey found almost 70% of U.K. firms expected to increase time and money spent on conduct risk, in part because of increasing regulatory attention and fines. If money has to be spent, invest in a solution that will continue to work for you. Firms regulated by the FCA need a sustainable and holistic SMCR management approach, as the already complex regulation is only getting more complicated. With an effective SMCR framework, firms can better manage their regulatory obligations. In fact, implementing a tool specifically designed for SMCR compliance will help firms make regulatory adherence a priority throughout every stage of the process. This includes a management responsibilities map to embed SMCR compliance directly into the corporate culture. Regulators want proof of management’s competency, so keep that evidence at hand by implementing compliance throughout the company via compliance technology. Assurance goes further than just management, though. Managers are responsible for the compliance of their subordinates, as well. Choosing an SMCR solution with integrated training and competency functionality will grant a better view of employee performance, conduct, and competency. Tracking competency evidence and testing will grant a holistic view of company risk and provide a detailed record if regulators come knocking. 2. ACCURACY AND RECORD-KEEPING Regtech solutions that focus on long-term risk reduction must include both accurate processing and record-keeping. Without this functionality, firms may find themselves with spotty audit trails backing inaccurate processes. On top of this, providing a management responsibilities map to regulators is currently a manual process involving spreadsheets and Word documents. Unfortunately, even with change tracking enabled, these methods are easy to manipulate, which means reduced document integrity. With Star’s Individual Accountability Regime regtech solution, firms have immutable records that fully detail the organizational ladder. This indisputable record is read-only when provided to senior management for sign off, and that makes it an accessible—but secure—audit history. If changes are made, the system can automatically notify the central team to review and submit them to regulators. This creates a true picture of the company’s compliance with the support of unquestionable document integrity. It’s a trusted audit trail that, because of the file management, can easily be provided within the appropriate deadlines when needed. 3. TIME AND COST SAVINGS Compliance isn’t going anywhere. In fact, the importance of regulatory compliance only seems to be growing over time. Rather than seeing it as a continuous set of hoops to jump through, work to bake SMCR compliance into the company’s culture. By creating an environment that naturally begets compliance, companies save time and energy otherwise spent hounding employees to submit documentation or complete required training. Rather, employees need to understand their individual accountability in corporate compliance. To do this, executives can incentivize compliance throughout each team member’s roles and responsibilities instead of creating rules that position regulation as a necessary evil. The motivation to remain compliant should not be to avoid punishment. Everyone should be driven by pride in doing the right thing. Brand reputation is essential for sustainable success, and everyone within the company should be vigilant about maintaining this. Even with ethics embedded into the core of a business, however, accidents can occur, so it’s essential that compliance teams can easily access a high-level overview of employees. With everything in one place, however, it’s no problem to track employee trading or certifications. Firms with a large staff require a time-consuming annual certification process. Compliance teams have tight deadlines to track down employees and ensure mandatory certification is complete. Individual Accountability Regime makes this much easier with a reporting dashboard that shows a bird’s-eye view of everything in the organization, including potential issues. This enables scalable certification. Also, IAR prioritizes annual certifications as a critical activity. Not only that, it collates professional qualifications, statements of professional standing, mandatory training, and other data points for each and every staff member. This provides a full, data-driven employee competence database that leaves no room for assumptions, which allows leadership to make more proactive decisions about what’s happening within the organization. 4. EFFICIENCY AND TRANSPARENCY GROWTH The IAR software module provides a trackable and secure platform to ensure Star clients maintain regulatory compliance during any market conditions. It strengthens individual accountability programs while effectively reporting to financial regulators like the FCA. Whether adverse market conditions occur based on internal or external actors, IAR provides full, transparent accountability throughout the entire audit process. A full-suite regtech solution should have both a detailed view of each individual business unit, along with a holistic view that provides all the pertinent information at a glance. Automated reporting and regulatory auditing should be built in to enable easy access to an indelible record of organizational structure and accountability. Automatically gathering this information means you can quickly visualize certification gaps, and leadership can easily see how many people are currently certified versus how many are required. This gives you an idea of whose certification is lagging and therefore needs to be submitted. With IAR, not only can firms see what’s happening right now, they also have a solid, traceable track record that goes as far back as regulators need to have confidence in firm processes. MAKING SMCR COMPLIANCE A PRIORITY Numerous practical and administrative challenges are involved in SMCR compliance. Many firms use manual processes piecemealed across multiple platforms and end up wasting a lot of time and resources checking boxes and filling out spreadsheets. But regtech solutions are capable of so much more than that. They can transform a firm from being compliance reactive to proactive, or even preemptive. Firms must retain profitability while also remaining compliant with all regulations. But this isn’t easy if compliance officers are stuck in the weeds tracking people down to ensure training and certification are completed. Instead, they need an automated solution that frees their time up for the kind of higher-value work that ensures continued compliance through all market conditions. Star’s IAR solution does just that: easily adapting to ever-evolving FCA initiatives, with workflow solutions that can be configured and optimized for any firm’s processes.
16 May, 2022
For some, the ability to lead groups of people seems to be intuitive, but this can also be learned. In reality, good leadership needs to be developed—cultivated over time—and then maintained. But what does this involve?
09 May, 2022
The SEC is making a move into the private fund investment space. Here are the details and thoughts on how affected firms—like private equity funds and hedge funds—can efficiently and effectively manage it all