FCA and PRA streamline SMCR to boost growth

The reforms represent the first phase of a broader multi-stage package led by the Government and regulators to reduce regulatory burden while maintaining senior accountability.

Key points include:

➡️ Reduced Certification Scope: Removal of duplicate certification requirements for overlapping roles reduces the total number of certification roles by approximately 15%;

➡️ Streamlined Fit and Proper Assessments: Annual certification checks are simplified to reduce operational burden while maintaining standards;

➡️ Proportionate Enhanced Regime: Thresholds for enhanced firms increase by 30%, limiting the most stringent requirements to larger, more complex firms;

➡️ Clarified SMF Definitions: Improved guidance supports clearer interpretation of certain senior management functions (SMFs);

➡️ Extended Reporting Deadlines: Firms gain additional time to notify regulators of changes to senior manager responsibilities and directory updates;

➡️ Future Reform Direction: The Government proposes removing the Certification Regime from legislation and reducing the number of pre-approved SMFs, with further consultations expected in 2026.

✅ Firms should review SM&CR governance frameworks, certification processes and SMF mapping to align with the updated requirements and prepare for further reforms.