Motor traders: Prepare now for changes to motor finance regulations, before it’s too late

The FCA is introducing changes to the regulation of financal services, which will affect motor traders. Find out now what SM&CR means to your industry.

In less than a month's time, on 9th December 2019, the Senior Managers & Certification Regime (SM&CR) will come into effect throughout the UK.

This regulatory change will impact any business that offers financial services, including any motor dealers that provide financing options for their customers, who must comply with the new SM&CR.

At a glance, the SM&CR is intended to protect customers and their finances by increasing the accountability of senior leaders. Use these compliance steps to help your organisation prepare for the SM&CR:

  • Confirm what type of business you are—Different SM&CR standards apply to various types of organisations. With this in mind, it’s important to confirm your motor dealership’s classification (e.g. Core, Limited or Enhanced) to understand which regime you are required to follow. Guidance on this can be found in the FCA's guide.
  • Determine functions and responsibilities—You will then need to decide which senior managers will be responsible for conducting any regulated activities in your organisation, also known as senior management functions (SMFs). When deciding which senior managers will hold SMFs, be sure they can be trusted with their responsibilities by conducting a criminal record check. Individuals that hold SMFs will also need to have a written statement of responsibility in place that clearly documents their role.
  • Document everythingLastly, make sure your SM&CR compliance is properly documented and reflected within workplace policies, procedures and best practices.

Your motor finance provider will be your likely first port of call for any questions or information about how the new regulations might affect your business. The FCA can also be contacted on 0300 500 0597 if you wish to speak to them about what you need to do to remain compliant with the new regulations.

And for any questions around motor trade insurance generally, call the team at Bollington on 01625 854458.