The FCA and PRA have proposed changes to the Senior Manager Certification Regime (SMCR) ahead of expected legislative changes to the requirements.

The FCA has opened a consultation on streamlining the rules to:

• Give firms more time and flexibility to submit applications for approving new senior managers when there has been an unexpected or temporary change.
• Strip out duplication where the same individuals are certified for separate functions, which would reduce the number of certification roles by 15%.
• Provide guidance on how to streamline the annual checks firms need to undertake to certify individuals are ‘fit and proper’ to do their role.
• Allow more time for firms to report updates to senior manager responsibilities.
• Increase how long criminal record checks for senior manager applications are valid for, prior to application submission.
• Help firms to better understand the definition of certain SMF roles.
• Give firms more time to update the directory, which lists certified staff.

The FCA consultation will close on 7 October.

Nikhil Rathi, chief executive of the FCA, said: “Integrity and accountability at the top matter, which is why there is widespread support for the Senior Managers and Certification Regime. We are proposing streamlining the rules, so they work better for industry and support competitiveness and our approach to outcomes-based regulation, while maintaining the high standards the regime has set.”

The regulator is also asking firms what further changes to the SMCR they would like to see, with plans to make further changes as part of a second stage of work.

The Government is currently consulting on legislative changes to the regime, including removing the SMCR and increasing flexibility for regulators to reduce the number of senior management functions which require pre-approval. It first began reviews of the SMCR in December 2022 as part of the Edinburgh Reforms.