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The FCA and PRA have opened parallel consultations on plans to streamline the UK’s Senior Managers and Certification Regime. Proposals include removing certification checks for about 139,000 staff below senior-manager level and shifting some appointments from pre-approval to notification; regulators estimate the reforms could save firms around £2 billion over 10 years.
The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) have launched parallel consultations on proposals to streamline the UK’s Senior Managers and Certification Regime, including removing annual certification requirements for about 139,000 staff below senior-manager level. The regulators say the changes could save firms around £2 billion over 10 years, while keeping pre-approval and accountability requirements for key senior roles.
Under the proposals, firms would no longer need to obtain regulator pre-approval for a range of roles, including Chief Actuaries and Chairs of Risk and Audit Committees. Instead, firms would notify regulators of those appointments and remain responsible for checking that candidates are fit and proper. The regulators could still require pre-approval for an otherwise notified role in a high-risk case.
The plans would also remove the Certification Regime and related administrative requirements for roughly 139,000 people below senior-manager level, including annual certification checks and inclusion on the Financial Services Register through that regime. For most staff below senior-manager level, regulators also propose raising the threshold for reporting conduct-rule breaches and streamlining related training requirements.
Pre-approval would remain for specified senior roles, including chief executives, chief financial officers and chairs. The regulators say firms would still have to monitor staff competence, suitability and conduct, and that people whose roles no longer require pre-approval would remain accountable to the same standards. The consultations seek feedback on the full package and are open until 22 January.
How Firms’ Approval Duties Could Change
The proposed changes would shift some checks from regulators to firms. For affected appointments, firms could notify regulators rather than wait for pre-approval, potentially making recruitment and onboarding more flexible. The FCA and PRA say this would free up resources for customer and market outcomes, hiring, innovation and investment.
The scale of the proposals is substantial: the PRA estimates they would cut its SM&CR pre-approvals by 43% and halve the overall burden of its regime. For FCA enhanced solo-regulated firms, where fewer senior manager functions apply, the regulators estimate about 15% of applications would move to notification and two SMF roles would be removed, producing a further 19% reduction in the relevant burden. These are regulator estimates, not measured savings to date.
For employees, the end of certification checks would reduce a formal recurring requirement, but it would not remove firms’ responsibility to assess whether staff remain suitable and competent. The central policy question is how to reduce administrative steps without weakening the oversight of people whose decisions affect customers, markets and firm safety.
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Reforms Follow Earlier SM&CR Changes
The SM&CR was introduced 10 years ago to strengthen accountability among decision-makers in regulated financial firms. It sets out responsibilities for senior managers and conduct standards for staff, alongside certification and approval requirements. The FCA and PRA say the regime has improved accountability and governance, but that some administrative requirements can be made more proportionate.
The current consultations are described by the regulators as the second and most significant phase of reform. They follow changes introduced in April 2026, including longer timelines for senior-manager applications after unexpected or temporary changes, removing duplicate certification requirements for overlapping functions, and raising enhanced-firm thresholds by 30%.
The announcement accompanied Mansion House speeches by Katharine Braddick, the PRA’s deputy governor for prudential regulation and chief executive, and FCA Deputy Chief Executive Sarah Pritchard. The PRA’s wider five-year strategy, also announced by Braddick, focuses on financial-sector resilience, growth and competitiveness, data and technology, and transparency.
“These proposals keep checks in place for the most important roles, meaning individuals are accountable for their actions, but reduce the administrative burden where it isn’t needed.”
— Katharine Braddick, PRA deputy governor for prudential regulation and chief executive
Final Rules Depend on Consultation
The proposals are not final rules. The FCA and PRA are seeking feedback on whether the changes make the regime more proportionate while maintaining high standards of individual accountability and conduct. Some reforms require legislative change, and the regulators say policy is expected in 2027.
The published estimates do not establish how much any individual firm will save or how quickly changes would take effect. The source material also does not specify the final design of every proposed requirement or the criteria regulators would use to require pre-approval for a role initially handled through notification. Those details may change after consultation.
Responses Due by 22 January
Firms, individuals and other interested parties can respond to the FCA and PRA consultations until 22 January. The regulators will consider feedback before setting out policy expected in 2027. Some measures will also depend on legislation being passed, so the consultation schedule does not by itself establish when all reforms will begin.
The next substantive milestones are the publication of the regulators’ responses and final policy, followed by any required legislative steps and implementation details. Until then, existing SM&CR requirements remain in place.
Key Questions
What are the FCA and PRA proposing?
They propose reducing pre-approval requirements for some roles, ending the Certification Regime for about 139,000 staff below senior-manager level, and changing conduct-breach reporting and training requirements.
Which senior roles would still need regulator pre-approval?
The proposals retain pre-approval for roles including chief executives, chief financial officers and chairs. Regulators could also require pre-approval for an otherwise notified role in a high-risk case.
Would firms stop checking staff competence?
No. The regulators say firms would remain responsible for ensuring employees are competent, suitable and meeting conduct standards, including where certification requirements are removed.
How much could the proposals save firms?
The regulators estimate savings of around £2 billion over 10 years. This is an estimate for the proposed reforms, not a guarantee of savings for any particular firm.
When could the changes take effect?
Consultations close on 22 January, with policy expected in 2027. Some reforms require legislative change, and the source material does not give a complete implementation timetable.
Source: primary
