Why SMCR compliance is moving up the agenda again, with SMFs being banned?

From Kasim Garipoglu to Howard Duckett, the FCA is sending a clear message about honesty, integrity and senior manager accountability - to all SMFs.

If you work in compliance, the last couple of weeks will probably have felt familiar.

Another FCA prohibition. Another case centred on honesty and integrity. Another reminder that the regulator is still deeply interested in the people running firms, not just the firms themselves. But taken together, the recent action involving Kasim Garipoglu and Howard Duckett feels like more than a run of unrelated enforcement decisions. It looks much more like a signal. The FCA appears to be leaning harder into senior individual risk and asking a simple question: can this person really be trusted to hold influence in a regulated business? 

The Kasim Garipoglu case was a clear example. In its Final Notice dated 13 March 2026, the FCA banned him from performing any function in relation to regulated activities under section 56 FSMA. The regulator said he was not fit and proper because of a lack of honesty and integrity. That language matters. It tells firms that this is not only about technical failings or weak oversight. It is about character, judgement and whether an individual can be relied on in a regulated environment. 

Then came the Beauforce developments. On 20 March 2026, the FCA announced restrictions on Beauforce Corporation Limited and required the firm to return client money. The FCA said it had concerns about the suitability of senior management and the firm’s conduct in dealing with the regulator. Behind that announcement sits the 2025 Decision Notice relating to Howard Duckett, who held SMF3 and SMF16 roles. In that notice, the FCA said he had been disqualified from acting as a company director for ten years, had failed to notify the FCA of that disqualification, and was not fit and proper because of concerns including honesty, integrity and reputation. The Beauforce Decision Notice also highlighted that he was the firm’s only approved person, which turned an individual issue into a wider firm governance problem. 

That is why this matters for SMCR.

For many firms, SMCR still gets treated as a governance framework made up of forms, maps and annual sign-offs. Of course those things matter. Statements of Responsibilities matter. Certification matters. Conduct Rules training matters. But the FCA cases that tend to land hardest are usually the ones where firms failed to recognise what was sitting in plain sight: a senior individual whose behaviour, candour or judgement had become a regulatory risk. The FCA’s fit and proper test in FIT 2.1.3G remains the anchor point here. It says firms should consider honesty, integrity and reputation, competence and capability, and financial soundness. That is not a tick-box exercise. It is a live assessment. 

There is also a practical SMCR point that often gets missed. Senior manager risk rarely stays “individual” for long. Once concerns arise about a senior person’s honesty, non-disclosure or ability to hold office, the FCA quickly starts looking at the wider control environment. Who knew? Who challenged? Was the issue escalated? Were approvals still appropriate? Did anyone revisit the fit and proper assessment? Was the board too reliant on one person? That is exactly why these cases should worry firms with lean governance, founder-led structures or a heavy dependence on one or two key SMFs. 

The Howard Duckett matter is especially uncomfortable in that respect. According to the FCA’s 2025 notices, Mr Duckett held both the Executive Director function, SMF3, and the Compliance Oversight function, SMF16, and Beauforce had no other approved person. When the individual at the centre of the governance structure becomes the source of the governance concern, firms can run out of road very quickly. 

So what should firms take from this?

The first point is that annual fit and proper assessments need to be much more real. A short form and a declaration are not enough on their own. Firms need to be willing to look at behaviour, escalation history, dealings with the regulator, findings from internal reviews and the way control functions are treated in practice. If a senior individual consistently sidelines compliance, resists challenge or fails to disclose something material, that is not merely a management style issue. It goes to fitness and propriety. The relevant FCA framework is already there in FIT, COCON and the broader SMCR regime. 

The second point is that Conduct Rules training often needs a refresh. Too much SMCR training still explains the structure of the regime without really helping senior people understand how cases arise in real life. The stronger approach is scenario-based training: regulatory disclosure failures, board challenge, pressure on control functions, certification concerns, personal conduct issues and what to do when a fact comes to light that changes the regulatory assessment of a senior individual. That is where SMCR becomes practical. This is an inference from the recent FCA cases rather than a direct FCA quote, but it follows closely from the themes in the notices. 

The third point is that boards and HR teams need a closer link with Compliance. In many firms, pieces of the SMCR picture sit in different places. HR may hold conduct information. Compliance may hold regulatory correspondence. Legal may hold investigation outcomes. Senior managers may hold context that never makes it into the formal assessment. The FCA’s recent actions are a reminder that fragmented information can create blind spots. Again, that is not a new rule. It is a governance reality. 

For firms in insurance, broking and the wider UK regulated market, this feels like a genuine risk trend. The FCA is not only asking whether firms have the right SMCR paperwork. It is asking whether the people running firms are fit to do so, whether problems are disclosed, and whether the firm reacts quickly enough when those questions arise. That is why SMCR compliance is moving up the agenda again.

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