United Kingdom's Financial Conduct Authority and Prudential Regulation Authority consult on phase 1 streamlining of the Senior Managers and Certification Regime

The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) published consultation papers setting out phase 1 proposals to streamline the Senior Managers and Certification Regime (SM&CR), aiming to reduce unnecessary burden on firms while maintaining accountability and protections for consumers, markets and the safety and soundness of firms. The package sits alongside HM Treasury’s consultation on potential legislative changes to SM&CR, including removing the Certification Regime and giving regulators greater flexibility to reduce the number of senior management functions (SMFs) requiring pre-approval. Proposals include giving firms more time and flexibility to submit senior manager approval applications following unexpected or temporary changes; removing duplication where individuals are certified for separate functions, reducing the number of certification roles by 15%; and providing guidance on streamlining annual ‘fit and proper’ certification checks. Other measures would extend time for reporting changes to senior manager responsibilities, lengthen how long criminal record checks remain valid prior to application submission, clarify aspects of the definition of certain SMF roles, and give firms more time to update the directory of certified staff. Responses to the regulators’ consultation were due by 7 October 2025. The FCA also sought views on potential phase 2 changes that could be enabled by legislative amendments, while HM Treasury indicated a further phase could include a more proportionate replacement for the Certification Regime, a significant reduction in roles requiring regulatory pre-approval, and further streamlining of the assessment process.