Senior Managers and Certification Regime (SM&CR) Reform Announcement

On 15 July 2025, the Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), and HM Treasury (HMT) unveiled long-awaited consultations proposing the first phase of reforms to the Senior Managers and Certification Regime. This is a headline announcement that signals progress, but on closer inspection the changes do not appear to be as big as the financial services industry may have expected.  

What do these proposals actually mean for firms? 

Despite the headlines around streamlining, growth, and “cutting red tape”, most firms will find that the fundamental structure and demands of SM&CR remain firmly in place. Yes, there are welcome operational tweaks including slightly longer deadlines, fewer duplicated checks, and proposals to reduce some pre-approval bottlenecks, but these are largely administrative reliefs, not strategic overhauls. 

For example, the proposed removal of the Certification Regime may sound bold, but there’s no confirmed replacement yet. Until there’s a more concrete outcome on this from Phase 2 consultations, firms still need to maintain certification records, fit and proper assessments, and audit trails. Further, fewer pre-approvals may help with hiring delays, but firms will still need to clearly document senior responsibilities, maintain Statements of Responsibility (SoR) documents, and manage regulatory notifications. Again, more generous timelines for updates and checks reduce immediate pressure, but don’t change the substance of what firms are expected to track and report. 

Has a “reform” really been proposed? 

In some ways, the reform announcements bring genuine benefit to firms. For example, they will likely be reducing the amount of time spent on tasks such as completing and chasing documents, including criminal record checks. However, if the industry was expecting a simpler, less burdensome accountability framework overall, then it’s difficult to see how this delivers. For example, senior managers will still need to be identified, their responsibilities documented, and their conduct scrutinised. In this context, framing these changes as a major deregulatory shift aimed at driving growth may be overstating the case. While the proposals will ease some administrative burdens, they do not materially reduce the scope, expectations, or regulatory scrutiny that firms and their senior leaders face. As such, framing this as a deregulatory move to “help boost growth” feels overly optimistic. 

What should firms take away from the announcement? 

The reform proposals should send a signal that while change may be on the horizon, firms should not tear up their SM&CR processes just yet. The key responsibilities, processes, and controls are still required, and will be for the foreseeable future. However, there is opportunity for firms to use the announcement as a reminder to be proactive in enhancing their approach to managing SM&CR requirements.  

Firms should assess where governance workflows can be simplified, for example by reviewing processes, automating reminders for certification reviews, centralising SoR updates using standardised templates, and improving coordination between HR and Compliance teams for SMF onboarding. Now is also the time to engage with the consultation and begin thinking ahead to Phase 2, particularly around the possible removal or redesign of the Certification Regime. Forward planning, including assessing your certified personnel and identifying inefficiencies, will make future transitions smoother.  

More broadly, firms should take a step back and consider whether their current SM&CR operating model is fit for purpose. Even small reforms offer a reason to ask: are we managing compliance efficiently, or just compliantly?