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The PRA and FCA have opened parallel consultations on proposals to simplify the UK’s Senior Managers and Certification Regime. Plans include removing certification requirements for about 139,000 staff and reducing regulator pre-approval for some roles; the regulators estimate the changes could save firms around £2 billion over 10 years.
The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have opened parallel consultations on plans to simplify the UK’s Senior Managers and Certification Regime, proposing fewer regulator pre-approvals and the removal of certification checks for about 139,000 staff. The regulators estimate the reforms could save firms around £2 billion over 10 years, while retaining existing standards of individual accountability and conduct.
The proposals would remove regulator pre-approval for a range of functions, including chief actuaries and chairs of risk and audit committees. Firms would instead notify the regulators when making those appointments and remain responsible for deciding whether candidates are fit and proper. Some senior roles, including chief executives, chief financial officers and chairs, would continue to require pre-approval and fit-and-proper checks. Regulators could also require advance approval for roles that would normally be handled by notification if a case presented higher risks.
The plans would also remove the Certification Regime and its associated administrative requirements for around 139,000 people below senior-manager level. Those individuals would no longer face annual certification checks under the regime or appear on the Financial Services Register on that basis. For most staff below senior-manager level, the regulators also propose raising the threshold for reporting conduct-rule breaches and streamlining conduct-rule training, allowing firms to focus on more serious misconduct.
The regulators say firms would still have to maintain employees’ competence, suitability and conduct standards. They describe the changes as a way to reduce administrative demands without lowering accountability. The consultations invite feedback on all aspects of the proposals and are scheduled to close on January 22; the regulators expect to set out policy in 2027.
Fewer Checks, Continued Accountability
If adopted, the proposals would change how firms and regulators oversee appointments and conduct across a broad range of financial-services jobs. Moving some roles from pre-approval to notification could give firms more flexibility when appointing senior staff, while removing certification checks would reduce recurring administrative work for firms covering a large number of employees.
The regulators say firms could redirect resources towards customer and market outcomes, recruitment, innovation and investment. The estimated £2 billion saving over 10 years is the regulators’ forecast, not a reported saving already achieved. Whether the changes deliver that estimate will depend on the final rules and how firms put them into practice.
The balance between lighter processes and effective oversight is central to the consultation. Senior roles such as CEOs and CFOs would remain subject to pre-approval, while firms would retain responsibility for staff standards even where regulatory certification or approval is removed.
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A Second Phase of SM&CR Reform
The SM&CR was introduced 10 years ago to strengthen accountability among senior decision-makers in regulated firms. The current announcement is the second and most significant phase of reform, according to the regulators. It follows changes made in April 2026, which included 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 regulators also provided estimates of how the proposals could affect approvals. The PRA expects its SM&CR pre-approvals to fall by 43% and says the overall burden of its regime would be halved. For FCA enhanced solo-regulated firms, where fewer senior-manager functions apply, the FCA estimates around 15% of applications would move to notification and two senior-manager roles would be removed, producing a further 19% reduction in the relevant burden. These are projections tied to the proposed changes, not completed outcomes.
“The Senior Managers Regime is an essential part of the UK’s regulatory framework.”
— Katharine Braddick, PRA chief executive and deputy governor for prudential regulation
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Final Rules Still Under Discussion
The proposals are not final. The consultation responses may affect the design and scope of any rules, and some reforms require legislative change. The regulators say they are consulting now so they can move quickly once the necessary legislation is passed, but the material does not give a timetable for that legislation.
It is also not yet clear how the proposed reporting threshold for conduct-rule breaches would be set in practice, or precisely how firms would apply the revised training requirements. The regulators’ savings and workload figures are estimates; the final impact on individual firms and employees has not been established.
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Consultation Closes January 22
The PRA and FCA are seeking responses to their respective consultations until January 22. They invite feedback on the proposals and are expected to publish policy in 2027. Reforms that require legislation will depend on that legislation being passed before they can be implemented.
Until final rules take effect, the existing regime remains in place. Firms and affected staff can review the regulators’ consultation documents and submit responses; the regulators have not announced a final implementation date.
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Key Questions
What are the PRA and FCA proposing?
They propose reducing pre-approval for some roles, removing the Certification Regime for about 139,000 staff, and changing conduct-breach reporting and training requirements. Some senior roles would still require regulator approval.
Will firms still be responsible for staff conduct?
Yes. The regulators say firms would remain responsible for ensuring employees are competent, suitable and meet appropriate conduct standards, including where pre-approval or certification checks are removed.
Which roles would continue to need pre-approval?
Roles including chief executives, chief financial officers and chairs would continue to require pre-approval and fit-and-proper checks. Regulators could also call for pre-approval in higher-risk cases involving roles otherwise subject to notification.
When can the proposals take effect?
The consultations close on January 22, with policy expected in 2027. Some reforms need legislative change, and no implementation date has been announced.
Source: primary
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