The Financial Conduct Authority (FCA) has begun the first phase of its reform proposals designed to streamline the senior managers and certification regime (SM&CR).

The changes, which have been launched with the Prudential Regulation Authority (PRA), are designed to make the regime more effective and efficient, while aiming to drive growth in the financial services sector.

The SM&CR holds individual managers in financial firms accountable for their conduct and competence.

The first phase comes as the Government consults on legislative changes to the regime, including the removal of the certification regime and increasing flexibility for the regulators to reduce the number of senior management functions (SMFs) which require pre-approval.

The FCA and PRA have said that the proposals aim to make the regime less onerous on firms, while continuing to protect consumers and markets, and the safety and soundness of firms.

The consultations, which have been informed by the regulators’ 2023 discussion paper, includes proposals to give firms more time to submit applications for approving new senior managers when there has been an unexpected or temporary change, strip out duplication where the same individuals are certified for separate functions, and provide guidance on how to streamline the annual checks firms need to undertake to certify individuals are "fit and proper" to do their role.

Furthermore, the proposals aim to give more time to firms to report updates on senior manager responsibilities, increase how long criminal record checks for senior manager applications are valid for, and help firms to better understand the definition of certain SMF roles.

Chief executive at the FCA, Nikhil Rathi, said: "Integrity and accountability at the top matter, which is why there is widespread support for the SM&CR. We are proposing streamlining the rules, so they work better for industry and support competitiveness and our approach to outcomes-based regulation, while maintaining the high standards the regime has set."

Chief executive at the PRA and deputy governor for prudential regulation at the Bank of England, Sam Woods, added: "High standards of accountability are important for maintaining confidence in our financial services industry. Today’s changes will reduce the burden of the SM&CR without diluting accountability, and we will work with the government on further reforms."

The consultation will close on 7 October 2025.

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