In this post, you'll learn how to find the right software platform for your compliance and surveillance staff to help you become and remain compliant with SMR requirements.
Given the events of the financial industry over the past 10 years, it's no wonder that both regulators and financial organisations are trying to do their best to uncover, prevent and stop misconduct and fraud from taking place.
When it comes to institutions, they have invested money and effort in Regtech software to meet increased regulatory demand and oversight. For their part, governments have created new entities and regulators have issued a heap of new legal measures to address the issues.
For instance, the Parliamentary Commission on Banking Standards (PCBS) was set up to “consider and report on professional standards and culture of the UK banking sector.”
In 2013, the PCBS published various recommendations to mitigate compliance and conduct risk. One of them led to the Senior Managers and Certification Regime (SMCR). A subset of which is SMR.
SMR is a set of rules that transfers responsibility for traders’ activities directly to senior management in the form of personal liability for misconduct or wrongdoing at their organisations. The implementation of these measures is overseen by the Financial Conduct Authority (FCA), which this year has opened more investigations than ever.
All of this is, of course, very nerve-racking for anyone working in finance and who is, or wants to be, a senior manager. In fact, SMR can even serve as a deterrent for entry into these senior roles. After all, is so much responsibility worth it?
To learn more about how Technology can help you prepare for the new SMCR regime, download this Whitepaper.
Here at Fonetic, we want to make it easy for compliance officers to understand their obligations from the regulatory point of view and to help them minimise their compliance risk. We offer you the tools to become more compliant throughout the lifecycle of your trades, so that you can focus on what matters most: creating value for your company.
When it comes to SMR, there are various requirements that the FCA is looking to see implemented across financial firms.
Here are 6 features that managers can't go without to meet their obligations under SMR.
Front office managers need to make their company transparent before any audit in order to show that any steps they have taken are reasonable for their organisation.
Proper escalation of issues. When an issue arises, it is usually first spotted by those in the lower levels of a financial institution (FI). If the matter is significant, it must be escalated together with its importance, which often tends to get lost.
Traceability of actions. This is probably the number one concern for any senior manager, as having the ability to trace their and their traders’ steps and show evidence for outcomes is the foundation for all other compliance matters under SMR.
“Explainability.” Beyond traceability, senior managers need to be able to explain a decision to someone who is not a subject matter expert (SME). For this reason, your surveillance solution must cover voice monitoring in addition to electronic communications.
Easy documentation and follow up. To abate potential breaches before they become issues, managers have to record their own steps and the steps of those under their wing quickly and efficiently, without wasting time waiting for third parties.
Policy fine-tuning from the front office. Efficiency is paramount to prove implementation of compliance standards and to safeguard one’s own, and an organisation’s, reputation as well as to avoid fines and even jail. For this reason, being able to tweak policies “at home” is key.
If after seeing this, you have doubts about your surveillance and compliance platform’s capacity to help you do your best work, keep reading and rest assured that there are answers to your worries. Fonetic wants you to save the day, evolve as a manager and help your company grow.
Fonetic's Trade Comms Suite, which includes state-of-the-art voice and e-comms surveillance, offers compliance teams much sought-after answers: we help you explain how any changes at your financial institution are more closely aligned with the regulatory requirements found in SMR.
Trade Comms Suite lets you trace actions taken at any level by any employee in any situation, regardless of how fast-paced the business or how many hierarchical steps there are before a decision is reached.