UK regulators are planning to cut the senior manager red tape to boost growth without diluting accountability, a move welcomed by many.
The Financial Conduct Authority (FCA) and Prudential Regulatory Authority (PRA) have proposed significant changes to the Senior Managers & Certification Regime (SM&CR), aiming to increase flexibility, remove duplication of certifications, simplify checks and streamline processes, while maintaining high accountability and customer protection standards.
“We are proposing streamlining the rules, so they work better for industry and support competitiveness and our approach to outcomes-based regulation, while maintaining the high standards the regime has set”, said FCA chief executive, Nikhil Rathi.
The SM&CR was first introduced in 2016 to protect consumers and improve market integrity by holding senior managers to account if expected standards weren’t met.
It is a mandatory regulatory obligation under the Financial Services and Markets Act 2000 (FSMA) and implemented through the FCA Handbook and PRA rules for dual-regulated forms.
“High standards of accountability are important for maintaining confidence in our financial services industry. Today’s changes will reduce the burden of the Senior Managers and Certification Regime without diluting accountability, and we will work with the government on further reforms”, said Sam Woods, chief executive of the PRA and deputy governor for prudential regulation at the Bank of England.
What do the proposals include
As part of phase 1 of reforms, the PRA and FCA jointly propose the following:
- If there has been an unexpected or temporary change, give businesses more time and flexibility to submit applications for approving senior managers.
- Remove duplication where the same senior managers are certified for separate functions, reducing the number of certification roles by 15%.
- Give guidance on how to simplify annual checks which certify individuals as ‘fit and proper’ to do their role.
- Increase the time businesses must report updates to senior manager responsibilities.
- Increase how long criminal record checks for senior manager applications are valid for.
- Help firms understand the definition of certain senior management function roles.
- More time for firms to update the FCA’s directory which lists certified senior managers.
In phase 2, the regulators will collaborate with the Treasury to make more changes to the regime. This includes what should replace the certification regime and the number of senior managers subject to approval.
Who is impacted
The consultation is relevant for all solo-regulated and dual-regulated firms. This includes third country branches. It could also apply to:
- industry groups and trade bodies
- consumer groups and individual consumers
- policy makers and other regulatory bodies
- industry experts and commentators
- academics and thinktanks
Key actions for firms
- Review your succession planning and use of the 12-week rule.
- Make sure interim candidates can be appointed quickly and within the new framework.
- Update internal compliance processes for:
- CRC checks
- SoR updates and submission cadence
- Certification cycles
- Assess certification scope for overlap and remove duplicative roles where allowed.
- Streamline regulatory reference procedures to meet the shorter 4-week deadline.
- Audit your current SM&CR structure against the new Enhanced thresholds.
- Respond to the FCA’s consultation by 7 October 2025 to shape Phase 2.
Key implementation dates
- Consultation deadline: 7 October 2025
- Policy Statement (final rules): Expected mid-2026
- Transition period for implementation: To be confirmed, but systems/process changes should begin now.
How FinregE helps firms meet SM&CR reform requirements
We can support firms implementing and maintaining compliance with the SM&CR. As it evolves, we capture every relevant change and flag any actions your business may need to take.
Here’s how we help:
Regulatory horizon scanning made SM&CR-specific
FinregE tracks FCA and PRA updates in real time. Each update is tagged by topic like “Senior Managers” or “Accountability”, so firms can filter for SM&CR-specific changes. You’ll see what’s new across approvals, responsibilities, and enforcement.
Digital rulebooks
Quickly map updated FCA guidance and rule text to your firm’s compliance framework automatically.
Compliance mapping & evidence
Map your SoRs, MRMs, PRs, and certifications in real-time to the regulatory requirements and export them directly in audit-ready formats.
Automate workflows
Track and trigger reviews for re-certification, SoR updates, and regulatory reference requests in a single workflow.
Governance reporting
Generate reports that demonstrate compliance with SMF responsibilities, conduct rule breaches, and certification activity, all aligned to new FCA expectations.
With FinregE, you can move from reactive to ready. Book a demo today
