The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) have announced proposals to reform the Senior Manager Certification Regime (SM&CR). The aim is to streamline the regime, making it more effective and efficient while fostering growth in financial services. These reforms are part of a broader government consultation on legislative changes, which include removing the Certification Regime and allowing regulators more flexibility in reducing the number of Senior Management Functions (SMFs) requiring pre-approval.
The proposed changes are designed to lessen the burden on firms while ensuring consumer protection, market integrity, and firm safety. Key proposals include giving firms more time and flexibility for submitting applications for new senior managers during unexpected or temporary changes, reducing certification roles by 15% through eliminating duplication, and providing guidance on streamlining annual checks for certifying individuals as ‘fit and proper.’
Additionally, firms would have extended timeframes for reporting updates to Senior Manager responsibilities and updating the Directory of certified staff. The validity period for criminal record checks prior to application submission would also be increased.
Nikhil Rathi, FCA chief executive, emphasized the importance of integrity and accountability at senior levels: “We are proposing streamlining the rules so they work better for industry and support competitiveness.” Sam Woods, Chief Executive of the PRA, said: “Today’s changes will reduce the burden of the Senior Managers and Certification Regime without diluting accountability.”
The consultation period will end on October 7, 2025.
Information from this article can be found here.
