Financial regulators have opened a second, wider consultation on changes to the UK’s Senior Managers and Certification Regime, proposing fewer pre-appointment checks for selected roles and the removal of annual certification requirements for about 139,000 staff below senior-manager level.
The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) say the proposals are intended to reduce administrative work while retaining individual accountability and conduct standards. The changes are proposals only: firms’ current obligations have not changed, and further legislation will be needed for some measures.
Selected roles would move to firm notification
Under the consultation, regulator pre-approval would be removed for a range of regulatory functions, including chief actuaries and chairs of risk and audit committees. Firms would instead notify regulators when appointing people to those positions. Firms would remain responsible for checking that candidates are fit and proper for the role.
Pre-approval would remain for key senior positions, including chief executives, finance chiefs and chairs. Regulators also propose retaining the ability to require approval for a role that would otherwise be subject to notification where a case is considered high risk. The change would therefore narrow the circumstances in which approval is routinely required rather than remove regulatory scrutiny of appointments.
The PRA estimates that its proposed changes would reduce pre-approvals under its part of the regime by 43 per cent. The regulators estimate that the proposals could save firms around £2 billion over ten years. Those are estimates attached to the consultation, not realised savings.
Certification checks and reporting thresholds
The proposals would end the Certification Regime and its associated administrative requirements for around 139,000 people below senior-manager level. Those staff would no longer be subject to annual certification checks or required to appear on the Financial Services Register solely through that regime.
That would not remove firms’ responsibility for their employees. The regulators say firms would still need to ensure staff remain competent and suitable and meet appropriate standards of conduct. The consultation also proposes raising the threshold for reporting conduct-rule breaches for most staff below senior-manager level and streamlining conduct-rule training requirements. The stated aim is to let firms focus reporting and training more closely on serious misconduct.
The SM&CR was introduced a decade ago to strengthen accountability among senior decision-makers in regulated financial firms. The regulators say the proposed simplification would preserve accountability for misconduct even as some routine processes are reduced.
Consultation runs until January
The PRA and FCA launched the parallel consultations on 22 October, alongside speeches at Mansion House in the City of London. Responses are invited until 22 January 2027, with policy expected to follow during 2027. The regulators have described this as the second and most significant phase of reform, building on changes made in April 2026.
Some of the measures require legislation before they can be implemented. The regulators say consulting now would allow them to move towards implementation once the necessary legislation is passed. Until that process is complete and final policy is set, the proposed notification arrangements, removal of certification checks and higher reporting thresholds should not be treated as rules in force.
The consultation asks firms and other interested parties how the regime could be made more proportionate without weakening standards of individual accountability and conduct. The outcome will determine which proposals, if any, proceed and how they are implemented.
