UK financial regulators proposed sweeping SM&CR reforms on 22 October 2026, aiming to reduce approval and annual certification requirements while retaining individual accountability. The Financial Conduct Authority and Prudential Regulation Authority estimate the changes would save firms around £2 billion over 10 years. The measures remain proposals, and some require legislation.
Key Takeaways
- Annual certification requirements would be removed for around 139,000 people below senior manager level.
- CEOs, CFOs and chairs would still need regulatory approval before taking up their roles.
- Consultations close on 22 January 2027, with policy expected to follow in 2027.
Table of Contents
- What the SM&CR reforms would change
- Which safeguards would remain
- How this builds on the April changes
- Legislation and consultation come next
- Conclusion
What the SM&CR reforms would change
The parallel consultations would narrow the roles requiring regulatory pre-approval under the Senior Managers and Certification Regime. Chief actuaries and chairs of risk and audit committees are among those whose appointments would instead be notified directly to regulators.
Firms would remain responsible for checking that candidates are fit and proper. The practical change would be to the appointment process, rather than the standard of accountability attached to the role.
The proposals would also remove the Certification Regime and its associated annual checks and Financial Services Register requirements for around 139,000 individuals below senior manager level. Regulators would raise the conduct-rule breach reporting threshold for most staff below that level and streamline conduct-rule training requirements.
| Item | Details |
|---|---|
| PRA pre-approvals | Expected to fall by 43% under the proposals. |
| Overall PRA regime burden | Expected to be halved. |
| FCA Enhanced solo-regulated firms | Around 15% of applications would move to notification. |
| Senior management functions at those FCA firms | Two roles would be removed, with a further 19% saving cited by regulators. |
Which safeguards would remain
CEOs, CFOs and chairs would continue to need pre-approval, including fit-and-proper tests, before appointment. Regulators would also retain the ability to require pre-approval for roles normally subject only to notification when a case presents higher risk.
Employers would remain responsible for ensuring staff are competent, suitable and meet appropriate conduct standards. Individuals moving out of pre-approval would continue to face the same level of accountability.
PRA chief executive Katharine Braddick said the proposals would preserve checks for the most important roles while reducing unnecessary administration. FCA deputy chief executive Sarah Pritchard said the aim was to maintain accountability and standards of behaviour through a more streamlined regime.
How this builds on the April changes
The October package is the second and more substantial phase of reform. The April 2026 changes to senior manager accountability had already addressed overlapping certification functions, application timing and the thresholds determining which firms face enhanced requirements.
That earlier phase raised many enhanced-firm thresholds by 30% and gave firms more time to submit senior manager applications following unexpected or temporary changes. The new proposals go further by seeking to remove certification requirements and shift more appointments from approval to notification.
The regulators expect lower administrative costs to free resources for recruitment, innovation and investment. Those are intended benefits, not outcomes already demonstrated by the proposed changes.
Legislation and consultation come next
Some reforms depend on legislative changes. The FCA and PRA said consulting now would allow them to implement reforms quickly once the necessary legislation is passed.
The consultations seek feedback on making the regime more proportionate while maintaining individual accountability and conduct standards. Policy is expected in 2027; the announcement does not establish a final implementation date.
Conclusion
The SM&CR reforms would reduce procedural checks without removing firms’ responsibility for staff suitability and conduct. The next confirmed milestone is the consultation deadline on 22 January 2027, followed by expected policy publication during 2027.
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