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The PRA and FCA have opened parallel consultations on changes to simplify the Senior Managers and Certification Regime, including removing certification checks for about 139,000 staff and shifting some roles from pre-approval to notification. Regulators estimate the reforms could save firms around £2 billion over 10 years while retaining accountability requirements. Responses are due by 22 January, with policy expected in 2027.
The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have proposed major changes to the Senior Managers and Certification Regime (SM&CR), including ending annual certification requirements for about 139,000 staff below senior-manager level. The regulators estimate the package could save firms around £2 billion over 10 years, while keeping individual accountability and conduct standards in place.
Under the proposals, firms would no longer need to obtain regulator pre-approval for a range of regulatory functions, including Chief Actuaries and Chairs of Risk and Audit Committees. Instead, firms would notify regulators of appointments and remain responsible for checking that people are fit and proper for their roles. Some senior appointments, including CEOs, CFOs and Chairs, would still require pre-approval and fit-and-proper checks. Regulators could also require prior approval for other roles in high-risk cases.
The plans would remove the Certification Regime and associated administrative requirements for around 139,000 people below senior-manager level, including annual certification checks and listing on the Financial Services Register under that regime. They would also raise the threshold for reporting conduct-rule breaches by most staff below senior-manager level and streamline related training requirements. The regulators say firms would remain responsible for staff competence, suitability and conduct.
The PRA and FCA say the proposals could reduce PRA SM&CR pre-approvals by 43% and halve the overall burden of the PRA regime. For FCA Enhanced solo-regulated firms, where fewer senior manager functions apply, the proposals would move around 15% of applications to notification and remove two SMF roles, producing a further 19% reduction in the relevant burden, according to the regulators. These are estimates tied to the proposed changes, not reported savings already achieved.
How Firms Would Gain Flexibility
If adopted, the changes would shift some appointment checks from regulators to firms, reducing the number of applications that require approval before a person can take up a role. The regulators say that could speed recruitment and give firms more flexibility, while freeing resources for customer and market outcomes, innovation and investment. The estimated £2 billion in savings over a decade is the regulators’ forecast; the consultations will test the design and likely effects of the proposals.
For employees and senior leaders, the key distinction is that fewer formal approval and certification steps would not mean an end to conduct expectations. Firms would still have duties to assess suitability and competence, and individuals outside the pre-approval process would remain accountable under the regime. The regulators also say they will retain checks for the most important roles and may require approval in high-risk cases.
UK financial services SM&CR compliance handbook
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Second Phase of SM&CR Reform
The SM&CR was introduced 10 years ago to strengthen accountability among decision-makers at regulated financial firms. The new consultations are described by the regulators as the second and most significant phase of reform. They follow changes made in April 2026, which included longer timelines for senior-manager applications after unexpected or temporary changes, removal of duplicate certification requirements for overlapping functions, and a 30% increase in enhanced-firm thresholds for larger firms.
The PRA and FCA announced the consultations as part of Mansion House speeches by PRA Deputy Governor Katharine Braddick and FCA Deputy Chief Executive Sarah Pritchard. The regulators say some proposed reforms require legislative change. They are consulting now so they can prepare implementation plans while that process proceeds.
“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 Officer
FCA PRA regulatory compliance guide for financial firms
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Consultation Could Change Final Plans
The reforms are proposals, not final rules. The consultations invite views on all aspects of the package, including how to make the regime more proportionate without weakening accountability. The final scope and implementation details will depend on consultation feedback and, for some measures, legislative change.
The regulators’ cost and workload figures are forecasts. The source material does not set out a detailed breakdown of how the estimated £2 billion in savings would be distributed among firms or when individual firms might see savings. Nor does it specify which circumstances would lead regulators to require pre-approval for roles otherwise moved to notification.
UK financial services conduct risk and fit and proper assessment software
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Responses Due by 22 January
The PRA and FCA consultations are open for responses until 22 January. The regulators say they expect to publish policy in 2027. Some changes will also require legislation before they can take effect, so the proposals are not yet an operational timetable for firms.
Firms, employees and other interested parties can respond to the consultations and comment on whether the proposed checks, reporting thresholds and training requirements preserve appropriate standards. The regulators’ next steps will depend on the feedback and legislative progress.
financial services staff compliance training platform UK
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Key Questions
What are the PRA and FCA proposing?
They propose simplifying the Senior Managers and Certification Regime by removing some pre-approval requirements, ending certification checks for around 139,000 staff below senior-manager level, and changing conduct-breach reporting and training requirements.
Will senior leaders still need regulatory approval?
Some roles, including CEOs, CFOs and Chairs, would continue to require regulator pre-approval and fit-and-proper checks. Regulators could also require pre-approval for other roles in high-risk cases.
Does removing certification end firms’ responsibilities for staff?
No. The regulators say firms would remain responsible for ensuring employees are competent, suitable and meeting conduct standards, even where annual certification and register requirements are removed.
How much could the proposals save firms?
The regulators estimate savings of around £2 billion over 10 years. This is a forecast for the proposed reforms, not a confirmed amount already saved.
When could the changes take effect?
Consultation responses are due by 22 January, and the regulators expect policy to follow in 2027. Some proposals also require legislation, so the source material does not give a single implementation date.
Source: primary
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