Car retailers have been urged not to not put their preparations to comply with the Financial Conduct Authority’s (FCA) Senior Manager Certification Regime (SM&CR) “on the back burner” as a result of the recent deadline extension.
Originally scheduled to come into force on December 9, compliance with the new legislation which demands greater individual accountability for compliance across the UK’s car retail sector, has been delayed until March 31.
However, dealer compliance expert Tara Williams, group chief risk and compliance officer at AutoProtect Group and the managing director of i-Comply, is urging dealers not to grow complacent as a result.
“News that final SM&CR implementation will now come into force on March 31st is good news, with a recent survey highlighting that over 80% of dealers were not fully ready for the new level of personal accountability,” she said.
“The extension provides a vital window to ensure SM&CR and the broader motor finance changes on pricing model and commission disclosure changes, which are dominating the finance agenda right now, are totally aligned because if they are not, somebody in the business will be personally accountable for any failures.”
The personal accountability for a dealer’s finance activities that is part and parcel of SM&CR will come into sharp focus in 2021 as a new era of transparency comes into force for motor finance from January 28, with the introduction of a ban on discretionary motor finance commission models and new commission disclosure rules.
While SM&CR implementation deadline is not until two months later, Williams is clear that whoever holds SM&CR responsibility for a dealer or group, which is already in place but does not come into full effect until March 31, must ensure there is a business-wide commitment to the changes ahead.
Williams, previously F&I and compliance director at Group 1 Automotive, said: “Having held SM&CR responsibility at a major dealer group, I’m very aware that creating not only the processes and control necessary for compliance but also the required cultural focus on delivering good customer outcomes, is unlikely to be a quick fix if it has not already started.
“With many dealers still finalising their approach to the new motor finance policy amidst concerns for some on the impact of making changes that the regulator has forecast will save car finance customers £165 million a year in interest costs, there is much to be done in what is still a limited timeframe.”