Senior Managers & Certification Regime

The latest publications deliver Phase 1 of the wider reform programme. This is the timeline so far:

In line with the Financial Conduct Authority (FCA)’s secondary international competitiveness and growth objective, the reforms seek to make SM&CR more efficient and proportionate, while preserving its core objective: individual accountability at senior levels. The changes largely reflect industry feedback that, while SM&CR is effective, certain aspects have become administratively burdensome.

A central message of PS26/6 is that the FCA is not rolling back on SM&CR. Rather, it is refining the regime to address areas repeatedly raised by industry as overly rigid or duplicative, while keeping the underlying accountability framework intact.

The changes, which come as the first phase of a multi-stage package, deliver simplifications, clarifications, threshold relief and more generous timelines.

Senior Managers and Certification Regime and its implications for firms

For most FCA‑regulated firms, PS26/6 creates immediate opportunities to simplify governance processes and reduce compliance friction, particularly around senior manager transitions and certification cycles.

What are the key simplifications outlined in PS26/6?

PS26/6 introduces a package of targeted operational easements rather than structural reform:

Changes effective from 24 April 2026	Increased/decreased/ burden/neutral
Criminal record checks (CRCs)*: Validity period for CRCs extended from 3 months to 6 months. New CRCs are no longer required where an SMF holder moves internally or within group.	Decreased
12-week rule[1]: Firms have 12 weeks to submit an SMF application (not obtain approval), and the individual may act in role while the application is determined. Senior Manager Conduct Rules apply in this period.	Decreased
SMF applicability: Additional guidance issued to reduce SMF7[2] applicability (SUP 10C.5B). Additional guidance issued to reduce SMF18[3] & SMF22[4] applicability (SUP 10.7).	Decreased
Prescribed Responsibilities (PRs) guidance (SYSC 24.3): Guidance on the appropriateness of splitting PRs. Guidance on the allocation of PRs to SMFs.	Decreased
Statements of Responsibilities (SoRs)*: Unless changes are made to a firm’s SoRs, no submission is required. Firms are to submit amended SoRs on a periodic basis and no later than six months after the last submission, rather than after every material change.	Decreased
Management Responsibilities Maps (MRMs)*: Submission requirements aligned with SoRs.	Decreased
Certification timing flexibility*: Guidance on recertifying individuals as fit & proper: Certificates do not need to be provided in hard copy (emails suffice). Annual criminal record checks are not required. The re-certification process can be managed within existing processes (such as in appraisal cycles).	Decreased
FCA directory updates: Deadline extended from 7 to 20 business days (with limited exceptions, such as departures).	Decreased
Regulatory references: Timeframe to respond to a request for regulatory references shortened from 6 to 4 weeks.	Increased
Additional guidance on Conduct Rules*: Only Conduct Rule breaches that result in specified disciplinary actions (‘suspension’ or ‘reduction or recovery of any of the person’s remuneration’) need to be notified to the FCA. Clarification that if no specified disciplinary action has occurred, this need not be disclosed in regulatory references and does not inherently impair an individual’s fitness or propriety.	Neutral

Changes effective from 10 July 2026	Increased/decreased/neutral
SMF18 at solo-regulated firms: A rule change permits SMF18s at solo-regulated firms to hold any PR.	Neutral
Enhanced SM&CR threshold*: Financial thresholds determining “Enhanced” SM&CR status increased, moving some firms into the core regime. Threshold to be reviewed by the FCA every 5 years.	Decreased
Certification overlap*: Removed duplication in the Certification Regime by removing the need to certify the same individuals to perform overlapping functions. The regulator will remove duplicate roles from the directory.	Decreased

Changes effective from 10 July 2026

Increased/decreased/neutral

SMF18 at solo-regulated firms:

A rule change permits SMF18s at solo-regulated firms to hold any PR.

Neutral

Enhanced SM&CR threshold*:

Financial thresholds determining “Enhanced” SM&CR status increased, moving some firms into the core regime.
Threshold to be reviewed by the FCA every 5 years.

Decreased

Certification overlap*:

Removed duplication in the Certification Regime by removing the need to certify the same individuals to perform overlapping functions.
The regulator will remove duplicate roles from the directory.

Decreased

References

* The PS notes that these may be subject to further change in the subsequent phase of reform.

[1] The FCA’s 12-week rule allows a firm to appoint an individual to perform an SMF on a temporary basis for up to 12 weeks in a consecutive 12-month period, without prior FCA approval, where the absence is temporary or reasonably unforeseen.

[2] SMF7 is the FCA’s Group Entity Senior Manager Function, applying to the individual with overall responsibility for a UK‑authorised firm’s activities carried on from, or through, a group entity.

[3] SMF18 is the Other Overall Responsibility function, applying to the individual with overall responsibility for an area, activity or function of the firm that is not otherwise allocated to an approved SMF.

[4] SMF22 is the Other Local Responsibility function, applying to the individual with local responsibility for a branch’s activities, business areas or management functions where no other SMF applies.

Senior Managers & Certification Regime review Phase 2

The reform of SM&CR is to be conducted in phases with the second phase focussing on legislative change.

Reforms have already seen improvements made to the SMF approval process, including swifter assessments and enhancements to Form A; but PS26/6 speaks of additional commitments to further enhance the approvals process in Phase 2, including to:

Further simplify online forms.
Reduce and consolidate the documents required to support an application.
Update the wording of questions for further clarity.

The commitment to easing the administrative burden has also been echoed in the ‘Enhancing Financial Services’ bill of the 2026 King’s speech, delivered on 13 May 2026. The bill speaks to easements being “proportionate without compromising on core consumer, prudential and market protections”, and includes the reduction of the overall regulatory burden of SM&CR by 50%.

Alongside this policy statement, the Treasury has published its consultation response, committing to the legislative reform which will underpin Phase 2. The package is anticipated to include:

Legislative change	Impact to regulators
The removal of the Certification Regime from primary legislation, including the annual recertification requirement.	Enable the regulators to consider a more proportionate and flexible framework in their rulebooks.
Repeal of the prescriptive legislative provisions relating to Statements of Responsibilities.
Reduce the number of senior management functions that require regulator pre-approval.	Increased flexibility to specify when firms may notify regulators of a senior manager’s appointment after assessing their fitness and propriety.
Repeal legislative requirements on firms to notify regulators of breaches and to conduct mandatory training.	Regulators will retain the power to make or streamline Conduct Rules and set out appropriate requirements in their rulebooks.
Increase the power of the Regulators.	Enable the regulators to specify the time-limits or conditions in which they may accept senior manager applications, the approval of which would not trigger statutory notice requirements.
Amend the financial markets infrastructure SM&CR regime legislated in FSMA 2023, to be consistent with the wider SM&CR reforms.	Removes legislative restrictions to consult on further rule changes for SM&CR.

Following this legislative change, the Regulators will consult on the second phase to consider additional reform.

Key takeaways of PS26/6: Senior Managers & Certification Regime review

PS26/6 represents a measured recalibration rather than a reset of SM&CR. It delivers practical, near-term relief in areas that firms have long identified as inefficient, while reinforcing that individual accountability remains non-negotiable. Firms that proactively update their SM&CR frameworks can realise genuine efficiency gains but should do so with one eye on Phase 2 reforms later in 2026, when more fundamental legislative change is expected.