One turbulent year on from the extension of the British Senior Managers & Certification Regime (SM&CR) and with the next deadline fast approaching on 31 March 2021, we reflect on the regulatory challenges that lie ahead.

This week marks one year since the SM&CR came into force for firms regulated solely by the Financial Conduct Authority and every company should be asking itself: ‘Have we kept our Statement of Responsibilities up to date?’

So-called solo-regulated firms made prodigious efforts before 9 December last year to ensure that they were SM&CR-compliant. This activity has calmed down but some problems still remain. These include a continuing requirement to keep information up-to-date, the maintenance of audit trails and documentary evidence and the need for regular reviews and quick retrievals of information. Firms must also assess their senior managers and certified persons at least once a year to ensure that they are still "fit and proper" for work.

When a firm implements the SM&CR poorly, it can become bureaucratic and foster delays and an unwillingness to make decisions out of fear of being held personally responsible if something goes wrong. However, when the firm obeys the SM&CR correctly and in the spirit in which it was intended, it can benefit its culture, provide it with a clear trail of accountability and allow its managers and staff to perform their responsibilities with confidence.

Many companies may have opted to manage their SM&CR manually, using spreadsheets and word processors. They might believe that the old ways are the best, but this makes the process inefficient and risky and may turn it into a tick-box exercise, thereby defeating the purpose of the regime.

Firms avoid the use of software on the grounds of cost, complexity and lengthy implementation timescales, but there are plenty of different packages which range from native to cloud, annual contracts to monthly subscriptions, and cost per system to cost per individual. In the end, they are bound to reduce the administrative workload of every firm that uses them.

HM Treasury has agreed to delay, from 9 December until 31 March next year, the deadline for solo-regulated firms to have undertaken the first assessment of the fitness and propriety of their certified persons. This is a boon for firms significantly affected by the Coronavirus pandemic.