SMCR training: 5 things your Line Managers need to know

The Senior Manager and Certification Regime (SMCR) is now well-embedded in the banking sector. Its extension across the rest of the financial services industry will be completed at the end of this year. One of the key lessons learned to date is a growing recognition of the important role that Line Managers, particularly Line Managers of Certified Persons, play under the SMCR. Find out more in this blog post from Eukleia’s Principal Consultant, Liz Hornby.

The lack of initial focus on the Line Manager population is understandable. To date, many firms have tailored their SMCR training to meet the training needs of the three main categories of staff established under the regime, namely, Conduct Rule Staff, Certified Persons and Senior Managers.

However, we are increasingly advising clients to add an additional fourth category, Line Managers, in order to ensure that their specific training needs are fully addressed. This fourth category includes the Line Managers of both Certified and Conduct Rule Staff populations, although the training needs of these two sub-categories will vary.
A diagram showing the importance of Line Managers in SMCR training

Mapping the SMCR training needs of Line Managers to the employee life cycle

A productive approach to identifying the specific learning needs of the Line Manager population is to map their interactions with the SMCR to the employee life cycle, from new joiners to leavers.

In the diagram below, we have identified five key interactions that can be translated into five learning objectives.

A diagram of the employee life cycle, showing the importance of Line Managers in SMCR training

The employee life cycle is also a helpful framework for enabling Line Managers to develop a better understanding of how the component parts of the SMCR, at least those that they interact with on a day-to-day basis, fit together.

1. New Joiners and Leavers

At the start of the employee life cycle, it is vital that Line Managers can both identify a vacancy as a Certified or Conduct Rule Staff role and understand the regulatory and procedural implications for the distinction. For example, for the Certified population, this may include completing and documenting an initial Fit and Proper (F&P) assessment and understanding the implications of receiving a Regulatory Reference for a potential recruit. Regulatory References may also be relevant at the other end of the employee life cycle when staff leave.

2. F&P Assessments

It is likely that Line Managers will play a leading and influential role in the annual F&P assessment process. It is therefore imperative that they fully appreciate both the significance of the process within the SMCR and the importance of it being applied consistently and fairly across the organisation.

Beyond the formal annual assessment, Line Managers are also the individuals most likely to be in a position to identify and escalate potential F&P concerns, spanning competence, conduct and culture. A further important learning objective here is to ensure that Line Managers fully understand the potential personal accountability implications for them if they fail to escalate F&P concerns.

3. Conduct Rule Breaches

Line Managers are also the group most likely to be aware of potential Conduct Rule breaches within their teams. This means they are the ones most likely to have the responsibility for escalating them. Again, consistency and fairness are important, as is an understanding of the personal accountability implications of a failure to escalate.

One of the hardest issues to tackle here is perhaps the fact that there is often no ‘black and white’ answer to whether a Conduct Rule has been breached. Each case must be determined on its facts. It is therefore not only imperative that Line Managers understand what a potential Conduct Rule breach looks like and how to report it, but also that they are not charged with the responsibility of deciding whether the threshold has been met.

 


 

Discover more with our definitive guide to the SMCR

 


 

4. Disciplinary Panels

This brings us to the role of the internal Disciplinary Panel. It is important for Line Managers to have an understanding of the role of the Panel in determining whether a Conduct Rule has been breached. Beyond this, some Line Managers may from time to time be asked to sit on a Panel. Those individuals will also need an understanding of the process.

5. Management

Last, but by no means least, is the day-to-day management role of Line Managers under the SMCR.

There are three key points to make here.

  • Firstly, Line Managers must be able to confidently and accurately answer questions about the SMCR from their team.
  • Secondly, Line Managers set the tone for their team in terms of culture and conduct. They must, therefore, fully understand both the standards set by the regulators and the organisation in this regard in order to properly discharge this responsibility.
  • Thirdly, it is important to acknowledge that Line Managers are held to very similar standards as Senior Managers under the SMCR in relation to a number of aspects of their management role. Good examples include delegation and competence. This means that Line Managers may be held accountable for the failings of members of their team. It is important for them to fully appreciate what this means in practice and to understand the ‘reasonable steps’ expected under their organisation’s procedures.

How to provide SMCR training for Line Managers

Both digital and face-to-face approaches are options for Line Manager SMCR training, or indeed a blended solution of both.

Your choice may well be determined, in part at least, by the size of your Line Manager population. But whichever approach you choose, the training needs to be a practical job tool that not only provides the information that Line Managers need, but also makes them feel supported in their role.

A manager mentoring an employee to help increase their engagement in compliance training

For more insights on SMCR training, download our free ebook, ‘How to ensure your organisation is SMCR-ready’.

 

Eukleia has extensive experience of SMCR training and supporting organisations to implement it. To find out more about our off-the-shelf courses, custom solutions and face-to-face training options, get in touch.

To request a free trial of one of our off-the-shelf courses today, scroll to the Personal Conduct section of our generic course catalogue.

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