FCA publishes new SMR consultation for benchmark administrators

The FCA has published a new consultation on how to apply the Senior Managers Regime (SMR) to benchmark administrators.

The SMR sets important standards for governance and accountability, and the FCA has announced it will apply to almost all of its regulated firms from December 2019.

The regulator said that because benchmark administrators are a new category of authorised firms, they have been granted a one-year extension from the wider roll out of the SMR. The new rules will come into force for these firms on 7 December 2020.

According to the FCA, SMR is designed to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence.

The regulator said that for benchmark administrators, who provide ‘critical market infrastructure,’ their pricing of many financial instruments and contracts is dependent on the integrity of the benchmarks they are administering.

FCA executive director of strategy and competition, Christopher Woolard, commented: “Benchmark administrators play an important role in financial markets.

“As with all other firms offering regulated financial services, it is important that benchmark administrators have healthy cultures and high standards of personal conduct. Our proposals seek to ensure appropriate accountability for senior managers at these firms.”

The FCA said it would welcome feedback on the new proposals and aims to finalise its approach by Q3 next year.

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