UK Regulators Streamline Senior Manager Accountability

Last week, the UK Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) announced reforms to the Senior Managers and Certification Regime (SM&CR) aimed at reducing costs and improving flexibility for firms.

Key changes include extended deadlines for senior manager applications, reduced certification roles, streamlined annual fitness checks, raised enhanced firm thresholds, and lengthened timelines for reporting updates to senior manager responsibilities. In a related consultation response, the government proposed removing the Certification Regime, which applies to less senior roles, from legislation and giving regulators more flexibility to reduce the number of senior management functions (SMFs) that require pre-approval.

Economic Secretary Lucy Rigby stated the reforms aim at “cutting unnecessary complexity, halving the administrative burden, and building a simpler, faster and more competitive system.” The FCA’s Sarah Pritchard argued that the changes will keep “consumers and markets protected while making the regime more proportionate.”

“The SM&CR plays an important role in ensuring accountability in the provision of financial services, but it is right that we work to ensure it is well-targeted and efficient,” added David Bailey, Executive Director for Prudential Policy at the PRA. “Today’s reforms are an important first step in allowing firms to focus on what matters most, and we will continue to deliver further improvements to the regime as part of the wider reforms being made by the Government.”

Further regulatory consultations are planned later this year as part of the broader Leeds reforms.