Managing SM&CR in 2025

Hot on the heels of the Leeds Reforms is a review of the Senior Managers and Certification Regime by the Government and both financial regulators. The Leeds Reforms are aimed at lowering the regulatory burden felt by firms, something we have been talking about for several years as the cost of compliance has risen exponentially. This article will explore those key changes and what firms should be looking to ensure during the second half of 2025.

Changes to SMCR by the Leeds Reforms

The FCA and PRA have proposed changes in two phases, the first covering ‘quick wins’ that can be completed without changes to primary legislation and phase 2 tackling those which do require the lengthy process of legislative change.

Focusing on phase 1, currently subject to open consultation, we can expect to see a slightly simplified regime with greater flexibility. We are promised guidance on certification regime roles, aimed at reducing the numbers of staff captured and very much the same with senior managers under the senior manager regime. Equally we can expect clarification on the conduct rules, specifically when to report breaches to the regulator.

The 12-week rule will be extended to allow 12 weeks to fill a vacant SMF and upon submission of the SMF application the individual covering the role can continue to do so whilst the application is determined.

Streamlining SMCR Procedures

Prompted by, and in line with, the general direction of the FCA’s thinking many of our clients are putting work into finding efficiencies in their SMCR procedures, the aim is to reduce the overall time (and therefore cost) spent on the regime whilst maintaining current and future standards.

Many are turning to SaaS based solutions to streamline processes and maintain evidence of compliance. Systems, such as the PeopleClear SMCR system create a robust SMCR framework and audit trail. Whatever system you look for ensure that it can:

1.      Allocate functions and responsibilities   

2.      Maintain your management responsibilities map

3.      Maintain statements of responsibilities, including prescribed responsibilities

4.      Help with keeping statements up to date with past versions maintained

5.      Prompt and manage annual certification

6.      Assist with regulatory reference responses

Next Steps

Now the consultation is available, it is an ideal time to run through it, identify the likely changes and ensure you’re in line with the likely expectations once the consultation is complete. Of course, you can save time by asking us to assist with your review!

Equally, you might be interested in the time saving that can be gained from using the PeopleClear system, if you are interested in finding out more simply enquire with me: robert.bell@rbcompliance.co.uk and I can put you in touch.