Sleeping soundly in the age of SEAR

Individuals must be confident in their narrative. The challenges boil down to four fundamental questions:

1. What are your responsibilities?

2. How do you discharge them?

3. How can you be confident in your judgements?

4. How do you trust people to execute tasks that fall under your area of responsibility?

Drawing from our experience working with various organisations, we believe there are six essential foundations pre-approval controlled functions (PCFs) should consider to discharge their responsibilities effectively. 

Six essential foundations for SEAR confidence

1. Understanding

Integrating SEAR into daily operations is easier when people understand and engage with its spirit. This includes considering SEAR’s impact on day-to-day work and company culture.

2. Accountability

You can delegate tasks but not responsibility. Ensure that those contributing to your responsibilities have the necessary skills, time and competence. Clearly define roles and how they interconnect.

3. Governance

Assigning responsibilities is only part of the process. Ensure decisions are made at the appropriate level and that proper steps are taken to assess and address issues when they arise.

4. Reasonable steps and evidence

Evidential adequacy is often challenging. To build confidence, document how decisions were made, when and where they were discussed, and the rationale behind your judgements.

5. Alignment

Regulators expect SEAR to align with business objectives and strategic execution — a critical test is whether ‘the words and music are aligned’.

6. Sustainability

SEAR is here to stay. Ensure new employees understand its implications and that operational changes account for SEAR requirements. Maintain up-to-date vital documents, including PCF statements of responsibilities and the management responsibilities map.

Managing IAF with PwC’s Accountable Compliance platform

PwC has partnered with a regtech provider to offer our Individual Accountability Framework (IAF) platform, Accountable Compliance. This platform addresses all your IAF/SEAR needs in one place. Our managed service offering supports clients with ongoing annual compliance obligations under IAF post-implementation.

PwC’s Accountable Compliance managed service provides firms with a single data source and operationalises compliance obligations under the IAF. Key benefits include: 

• Management of PCF/CF population for personnel changes;
• Expert input on vital regulatory changes;
• Ongoing maintenance of SEAR documentation aligned with regulatory requirements;
• Reasonable steps framework and linking of PCF evidence
• Centralised storage for all key SEAR/IAF documents;
• Audit trail and timestamp for user updates;
• Version control of all essential documentation; 
• Customisable PCF reporting and management information (MI) dashboards; and
• Fitness & Probity certificate generation.

We’re here to help you

While IAF presents significant challenges, they are not insurmountable. Firms can successfully navigate these challenges by planning for ‘Day 2 Compliance’ and implementing the right solution. To discuss any aspect of your IAF compliance journey or explore PwC’s Accountable Compliance managed service, please get in touch with Sinéad Ovenden or Julie Kennedy. Together, we can work to protect your firm against regulatory risk while ensuring a stable, transparent and trustworthy financial system for all.