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Connecting Senior Managers and Certification Regime requirements with operational risk
The asset management industry often faces an interesting question: How can firms demonstrate good risk culture? While a concentrated focus has revolved around establishing and building robust risk management models, firms are now evolving into the next level of demonstrating how risk culture revolves around the models developed. Senior Management and Certification Regime (SMCR) is intended to play a pivotal role in evidencing good risk culture at firms if appropriately integrated with risk management. As the Financial Conduct Authority (FCA) states, the SMCR aims to:
• ‘encourage a culture of staff at all levels taking personal responsibility for their actions; and
• Make sure firms and staff clearly understand and can demonstrate where responsibility lies’.
If SMCR, governance and risk management are not integrated, it can result in wasting resources and time that could otherwise have been spent to grow the firm. This paper provides a solution in achieving such an integrated model. Please note this paper does not detail the regulatory steps (eg application forms, regulatory approvals or statements of responsibilities documented in role profiles) to be completed by firms. It rather discusses how SMCR can be integrated in practice into risk management.
The full article is available to institutions that have subscribed to the journal
Liezl De Villiers Getz is the head of operational risk identification at Aviva Investors. She is responsible for establishing, maintaining and overseeing the embedding of the Risk Management Framework, Risk Register, Risk Appetite Statement and related monitoring measurements. She started her career at KPMG (South Africa) in its financial services audit division and formed part of the financial engineering group responsible for specialist expertise in risk management and quantification of financial instruments and investment structures. Before joining Aviva Investors, she was previously at KPMG (United Kingdom) where her primary focus was the development and implementation of risk and control management frameworks, policies and processes as well as technical reviews of internal controls reports. She holds a bachelor in accounting honours degree from the University of Stellenbosch, is a qualified Chartered Accountant registered with the South African Institute of Chartered Accountants and is a member of the Institute of Operational Risk.