SM&CR Reforms

The news we were all expecting came out on 22 April, the FCA and PRA released a joint statement explaining they are pressing ahead with the reforms to the Senior Managers and Certification Regime (SM&CR) in much the same form that was announced as part of the Leeds Reforms.

The changes take effect between 24^th April 2026 and the 10^th July 2026, with provisions coming into force on one of those two dates. Those coming into force in April include:

• Firms have more time to submit senior manager applications when there has been an unexpected or temporary change, this amends the 12 week rule so that senior managers can undertake an SMF role, without FCA permission for longer than 12 weeks as long as   they submit an application to the regulator during this time.

• Helping to streamline annual checks to certify individuals as ‘fit and proper’ though using current internal processes such as appraisals.

• Helping to better understand the definition of certain senior management roles though additional handout guidance.

• Allowing more time to report updates to senior manager responsibilities moving to a six-month update model where only the latest statement and/or MRM needs to be submitted to the regulator.

• Increasing how long criminal record checks for senior manager applications are valid for, prior to application submission. The increase from 3 to 6 months which was originally outlined in the consultation has been confirmed. Checks will also not be required where a hire is made internally or from another company within a group. 

• Giving more time to update the directory, which lists certified staff, from 7 to 20 days.

In July the following will change:

• Making only larger, more complex firms meet enhanced standards, by raising many of the enhanced firm thresholds by 30%.

• SMF 18 will be allowed to hold any prescribed responsibility

• Removing the need to certify people to hold multiple overlapping functions, which will reduce the total number of certification roles required by around 15%.

The Government simultaneously released a consultation on the phase 2 changes; this is led by the Government due to the need to amend legislation to remove the statutory requirement to have the certification regime and to enable the regulators greater flexibility when defining in scope SMF roles.