Context
The FCA and PRA have confirmed changes to streamline senior manager accountability. The FCA’s Policy Statement PS26/6 (at a ‘streamlined’ 104 pages!) sets out how firms will benefit from reduced costs and greater flexibility and find it easier to comply with the Senior Managers and Certification Regime (SM&CR). The PRA’s Policy Statement can be found here.
Key points to note and next actions
The Government and regulators have announced first‑phase reforms to the SM&CR. Core senior accountability is retained, while reducing complexity and administrative burden for firms. Key impacts include:
- Extending the validity period of criminal records checks from three months to six months, with checks no longer required for intra-group moves.
- Giving more time to submit senior manager applications when there has been an unexpected or temporary change (the ’12-week rule’).
- Removing the need to certify people to hold multiple overlapping functions, which will reduce the total number of certification roles required by around 15%.
- Helping to streamline annual checks to certify individuals as ‘fit and proper’.
- Making only larger, more complex firms meet enhanced standards, by raising many of the enhanced firm thresholds by 30%, with a new 5-year mechanism for threshold increases.
- Helping to better understand the definition of certain senior management roles, and the allocation of Prescribed Responsibilities.
- Allowing more time (up to six months) to report updates to senior manager responsibilities (Statements of Responsibilities and Responsibilities Maps).
- Simplifying the re-certification process by allowing e-mail records confirming re-certification to replace the issuing of a further Certificate. Also, re-certification can become part of an annual review cycle rather than being a separate assessment
- Giving more time to update the directory, which lists certified staff.
- Reducing the period to respond to regulatory reference requests from six weeks to four weeks.
- Conduct rules guidance clarifications, including notification requirements, regulatory references without disciplinary action, and the application of the Senior Manager Conduct Rules.
HM Treasury has also published the outcome of its consultation of 15 July 2025 into reforming the Senior Managers & Certification Regime. Further Government proposals include:
- Removing the Certification Regime from primary legislation, including the annual recertification requirement, and enable the regulators to consider a more proportionate and flexible framework in their rulebooks.
- Reducing the number of senior management functions that require regulator pre-approval. Regulators will be given a new power to specify circumstances where it would be suitable for a firm to notify the regulators of the appointment of a senior manager following the firm’s assessment of fitness and propriety.
- Repealing the prescriptive legislative provisions relating to Statements of Responsibilities, enabling regulators to consider appropriate requirements in their rulebooks.
- Streamlining Conduct Rules by repealing the prescriptive legislative requirements on firms to notify regulators of breaches and to conduct mandatory training, while retaining the regulators’ power to make Conduct Rules and set out appropriate requirements in their rulebooks.
- Give regulators the power to specify in rules and guidance the circumstances in which they may accept senior manager applications subject to time-limits or conditions, approval of which would not trigger statutory notice requirements.
Additional changes are expected following regulator consultations in 2026, aiming to halve the overall regulatory burden.
Most changes take effect on 24 April 2026, and 10 July 2026 so firms can benefit from them straight away. Changes made to align with PS25/23: ‘Tackling non-financial misconduct in financial services’, apply from 1 September 2026.