Is your organisation meeting the required financial services regulations?

Does your housing association provide debt advice to your residents? Do you provide advice and support on household budgeting? Despite that fact that most housing associations do this as part of their wider customer offer, and don’t charge fees for doing so, such activity could be classed as “debt counselling” and you are likely to be subject to the Financial Conduct Authority’s (FCA) Senior Managers and Certification Regime (SMCR).

The SMCR took effect from 9 December 2019 and has its roots in the 2008 financial crisis. It means that no one can engage in regulated financial activity without having the appropriate authorisations from the FCA.

So if you renegotiate, reschedule or restructure your resident’s debts – that’s classed as “debt adjusting” and you are almost certainly subject to the SMCR.

And if you provide equity loans for leaseholders, be that administering existing loans or providing new ones, or you are thinking of providing support to help fund building safety works – that too falls within the remit of the SMCR.

In addition to ensuring your organisation has the correct authorisations, the SMCR has three key elements: 

• Senior Managers Regime.
• Certification Regime.
• Conduct Rules, which apply to senior managers, certified staff, employees who perform a role specific to the financial service business of the organisation, and board members.

The requirements can be straightforward, but it does present an additional administrative burden including annual “fit and proper person” tests for those classified as senior managers, certified staff and non-executives. There is a requirement for training for all those involved in managing the regime and in delivering the services in question.

Hopefully you are aware of your responsibilities under the SMCR, but if you’re not, you will need to find out more as there are civil penalties that include public censure and fines.

Contact usual solicitors who will be able to advise you further.

You may wish to contact one of our Sector Supplier partners, Forbes Solicitors or Penningtons Manches Cooper for further advice.