CP14/26 – Review of the Senior Managers and Certification Regime (SM&CR) – Phase 2
AI Analysis
The PRA has proposed the second and most substantial phase of reforms to the Senior Managers and Certification Regime, subject to enactment and commencement of the Financial Services and Markets Bill 2026. The package would shift many senior appointments from pre-approval to notification, remove most PRA Certification Regime assessment and documentation requirements for approximately 7,700 individuals, and extend temporary SMF cover from 12 to 18 weeks while retaining firms’ accountability for fitness, propriety, competence and conduct.
Key dates
- 2026-10-22
- PRA CP14/26 was published and the Phase 2 consultation opened.
- 2027-01-22 Deadline
- Deadline for responses to the PRA consultation.
Suggested considerations
- Compliance teams may wish to map current SMFs against the proposed pre-approved and notified categories, with particular attention to Chief Actuary, Risk Committee Chair, Audit Committee Chair and SMF7 roles.
- Firms should consider how they would evidence fitness, propriety, competence and conduct decisions if formal Certification Regime assessments, certificates and regulatory references are removed.
- Governance functions may wish to assess the proposed reduction in Prescribed Responsibilities and the future frequency of Statements of Responsibilities and Management Responsibilities Maps, while preserving clear accountability records.
- Firms may wish to review succession and contingency arrangements against the proposed 18-week temporary SMF cover period and assess whether internal approval workflows can support faster interim appointments.
- Dual-regulated firms should compare PRA CP14/26 with FCA CP26/37 and identify differences in scope, timing, forms, conduct-breach notifications and transitional arrangements.
- PRA-authorised firms may wish to prepare a consultation response addressing the proposed implementation period before the 2027 final policy.
- Firms should continue operating existing SM&CR approval, certification, fitness and propriety, regulatory-reference and notification obligations unless and until final rules and applicable legislative changes take effect.
- Compliance teams may wish to monitor the passage and commencement of the Financial Services and Markets Bill 2026 because the principal Phase 2 reforms depend on those legislative steps.
What changed
The PRA proposes to introduce a notification approach for almost half of current Senior Management Functions, including Chief Actuaries and Chairs of Risk and Audit Committees, while retaining an anticipated power to require pre-approval for an otherwise notified role in exceptional cases. Group Entity Senior Manager Function SMF7 would be divided between pre-approved and notified roles. The proposals would remove selected Prescribed Responsibilities, reduce the frequency of Statements of Responsibilities and Management Responsibilities Maps, and remove the obligation to maintain those documents for firms with a single Senior Manager, subject to temporary-cover provisions. The temporary SMF cover rule would be extended from 12 to 18 weeks, although firms would still be expected to submit a
Compliance impact
The proposal would have a high operational impact because it would require firms to redesign SMF appointment, governance-record, certification, conduct-notification and HR control processes across affected populations. It is not yet binding: existing requirements continue to apply pending legislation, final rules and commencement, and the PRA’s stated objective is to preserve individual accountabi
Who is affected
Related regulations
References
AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.
What the PRA said
Consultation paper 14/26
Published by PRA . Read the full notice at the source for the authoritative text.