Regulators unveil plans to simplify Senior Manager and Certification Regime
AI Analysis
The PRA and FCA opened parallel consultations on 22 October 2026 to substantially simplify the Senior Managers and Certification Regime (SM&CR), while retaining pre-approval and individual accountability for the most important roles. The proposals would remove certification requirements for approximately 139,000 individuals, shift selected senior functions from approval to notification, and reduce estimated industry compliance costs by approximately £2 billion over 10 years, but they are not yet binding and several changes require legislation.
Key dates
- 2026-10-22
- The FCA and PRA published parallel Phase 2 SM&CR consultations.
- 2027-01-22 Deadline
- Deadline for responses to the FCA and PRA SM&CR Phase 2 consultations.
Suggested considerations
- Compliance teams may wish to review the FCA consultation CP26/37 and PRA consultation CP14/26 and consider submitting responses by 22 January 2027.
- Firms should continue operating existing SM&CR approval, certification, Directory, Conduct Rule and responsibility-mapping processes unless and until final rules and any required legislation take effect.
- Firms may wish to map current Senior Management Functions and identify Chief Actuary, Risk Committee Chair and Audit Committee Chair roles that could move from pre-approval to notification, while retaining evidence of fitness, propriety, competence and suitability assessments.
- Compliance teams should identify employees who could fall outside the proposed Certification Regime and assess how internal competence, performance, disciplinary and conduct controls would operate without annual regulatory certification.
- Firms may wish to model the effect of the proposed Enhanced-regime threshold increases on their classification, governance documentation, prescribed responsibilities and approval processes.
- Firms should review Conduct Rule breach-reporting workflows and training curricula, but should not apply a higher reporting threshold or reduced training scope until the relevant final rules are published and effective.
- Governance teams may wish to assess the proposed removal of ongoing Statements of Responsibilities and Management Responsibilities Map submissions and determine what internal records will still be needed to demonstrate clear accountability.
- Firms with cryptoasset activities or planned authorisation may wish to consider the interaction between these proposals, the FCA's modification-by-consent approach for cryptoasset firms and the wider cryptoasset perimeter work.
What changed
The regulators propose removing pre-approval for a range of functions, including Chief Actuaries and Chairs of Risk and Audit Committees, with firms instead notifying the regulators and retaining responsibility for fitness and propriety. Chief Executive, Chief Financial Officer and Chair roles would generally remain subject to regulatory pre-approval, while regulators could require pre-approval for otherwise notified roles in high-risk cases. The proposals would remove the Certification Regime and associated annual certification and Directory requirements for approximately 139,000 individuals below senior-manager level, while preserving firms' responsibility to assess competence, suitability and conduct. The FCA also proposes removing ongoing submissions of Statements of Responsibilities a
Compliance impact
This is a high-significance consultation rather than a current change in legal obligations. If adopted, it would materially reduce approval, certification, Directory, reporting and training administration across a broad population of firms, but firms would still need robust evidence of individual accountability, fitness and propriety, competence and conduct; independent market commentary also emph
Who is affected
Related regulations
References
AI-generated analysis. May contain errors or omissions — verify with the original BoE source before acting. Full disclaimer.
What the BoE said
The number of financial services roles required to face enhanced checks from regulators will fall significantly under proposals that will support growth.
Published by BoE . Read the full notice at the source for the authoritative text.