The Financial Conduct Authority has asked stakeholders for comment on how it proposes to move regulated firms and individuals to the Senior Managers and Certification Regime (SM&CR).

The FCA has consulted on extending the new regime to almost all regulated firms. However, given the differences in the size and nature of firms covered by the extension, the FCA is proposing proportionate approaches for different types of firms.

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For the majority of FCA regulated firms, the FCA has proposed automatically converting individuals from the existing Approved Persons Regime to the SM&CR.

The FCA said this would mean the majority of firms would not need to submit applications to convert approved persons to senior managers, and could instead ‘focus on embedding the cultural changes that the new regime introduces and making sure their staff know what they need to do.’

The regulator is also consulting on extending the ‘Duty of Responsibility’ to insurers and firms solely regulated by the FCA. The Duty of Responsibility currently only applies to Senior Managers of banks.

Under the Duty of Responsibility, Senior Managers are responsible and accountable for the business areas they lead. The FCA can take action against the Senior Manager responsible where their firm has contravened an FCA requirement in their part of the business.

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Jonathan Davidson, executive director of supervision- retail and authorisations at the FCA, said: “Culture and governance in financial services and its impact on consumer outcomes is a priority for the FCA. Extending the Senior Managers and Certification Regime will drive forward culture change in financial services firms.

“This next set of our proposals outline our plans for a smooth transition to the new regime, which is simple, clear and proportionate. Indeed, the vast majority of firms will not need to submit applications to convert existing Approved persons to Senior Managers.”

In response to feedback, the FCA is considering what the move to the new regime means for the Financial Service Register.

The FCA welcomes feedback on the proposals and aims to finalise its approach in summer 2018. The date for the implementation of the new rules will be announced and set by HM Treasury in due course.