The FCA has just published its 2nd consultation - with proposals around transitioning - on extending the Senior Managers & Certification Regime to all solo regulated firms. A parallel consultation on transition to the new regime for insurers was also published. The rules will be finalised next summer.

As we expected, for all bar the insurers (who will be squeezed through at the end of next year), implementation won't be until after Brexit (ie post March 2019). However, despite the impending arrival of MiFID II and GDPR, there are good reasons why firms should now start thinking seriously about assessing the impact the new regime will have on their culture and operating model. 

Back in the mid-2000s, before the crisis, the FSA and the Practitioner Panel undertook what was seen as a ground-breaking piece of work, jointly commissioning research into what was termed the "administrative burden" of regulation. 

Unfortunately the results were far from conclusive, appearing to show a huge range in the cost of implementing new regulation. There was no obvious pattern distinguishing firms who spent a lot from those who managed to do so relatively cheaply. The experiment was not repeated.

At the time, this disparity was largely seen, including by me, as predominantly due to the difficulties of scoping the research, leading to responding firms classifying the same activities differently. However, having since been responsible for a number of large change programmes, I've come to believe that the "how" is at least as important as the "what", and that a chunk of the disparities in cost may well have been down to firms' approach.

Understanding the size and shape of the change, and agreeing the trade-offs and risks involved, is often critical to the success of projects. Add to this the specific cultural intent of SM&CR, highlighted in the quote here, and the importance of a quick and early top down gap analysis of what will be required becomes obvious. 

Thinking about the impact on your culture and strategy, and how you can implement and maintain the new regime in a cost effective way, should be equally key.

Finally, we will update our SM&CR Handbook in Q1 next year to take account of these new proposals, and of what we have learned from talking to firms.