UK Regulators Streamline SMCR Compliance in First Phase of Reforms
FCA, PRA, and HM Treasury unveiled Phase 1 SMCR reforms to simplify compliance for UK financial firms.
Why it matters: Legal and compliance professionals advising UK-regulated firms face a new, lighter regulatory framework, promoting efficiency without abandoning accountability. The changes pave the way for faster, more flexible management of senior staff obligations.
- Announced on April 22, 2026, by the FCA, PRA, and HM Treasury.
- Firms now have longer to file senior manager applications after unexpected changes.
- The number of certification roles has dropped by 15% due to scrapped overlapping role requirements.
- Thresholds for 'enhanced' regime firms have increased by 30%, targeting large, complex firms only.
The UK's Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA), and HM Treasury have launched the first phase of reforms to the Senior Managers and Certification Regime (SM&CR). The changes, announced on April 22, 2026, are aimed at reducing administrative burdens while preserving core accountability standards.
- Firms facing unexpected or temporary senior management changes now benefit from extended deadlines for submitting required applications, easing transition pressure.
- Certification for individuals with multiple overlapping functions is no longer necessary, reducing the total number of certification roles by about 15%.
- Annual 'fit and proper' checks can be integrated with usual appraisal cycles, aligning regulatory reviews with existing HR practices.
- The bar for qualifying as an 'enhanced' firm has risen by 30%, so only larger or more complex firms must meet these higher standards.
- Firms receive more flexibility and time to update both manager responsibilities and the certified staff directory.
- Criminal record check validity periods for senior manager applications have also been extended.
Sarah Pritchard, FCA Deputy Chief Executive, said "We’ve used our current powers to streamline the regime now, so firms can benefit before future legislation unlocks even more efficiencies."
Looking ahead, HM Treasury aims to legislate for further reductions, including removal of the Certification Regime from law, enabling the FCA and PRA to introduce more proportionate alternatives. The government targets a 50% cut in regulatory burden under SM&CR while maintaining strong individual responsibility standards.
David Bailey, Executive Director at the PRA, emphasized, "Today’s reforms are an important first step… and we will continue to deliver further improvements."
By the numbers:
- 15% — estimated reduction in certification roles after reform
- 30% — increase in threshold for 'enhanced' regime firms
- 50% — government’s targeted cut in SMCR regulatory burden
Yes, but: Specific implementation timelines for proposed legislative changes have not been disclosed.
What's next: Further legislative reforms are expected as HM Treasury moves to remove the Certification Regime from UK law.