Streamlining Senior Manager Accountability: The FCA’s SM&CR Reforms

On 22 April 2026, the Financial Conduct Authority (FCA) published its policy statement PS26/6, confirming a package of reforms to the Senior Managers and Certification Regime (SM&CR). These changes form part of a broader, multi-phase effort by the FCA, Prudential Regulation Authority (PRA) and HM Treasury to reduce unnecessary regulatory burden while preserving the core principles of individual accountability that underpin the UK’s financial services framework. This article summarises the key amendments taking effect under Phase One of the changes and looks ahead to the more far-reaching reforms envisaged under Phase Two.

Phase One: Immediate Changes

The FCA has confirmed that it will implement the Phase One reforms largely as consulted on in CP25/21, with most changes taking effect on 24 April 2026. These immediate reforms include:

• Record Checks. The validity period for criminal records checks has been extended from three to six months, and – helpfully for firms’ compliance teams – checks are no longer required for internal or intra-group moves.
• 12-Week Rule. Firms will be permitted 12 weeks to submit a senior management (SMF) application, rather than 12 weeks in which to obtain approval, with the candidate permitted to continue acting in the role until the application is determined.
• Notification of Changes. Firms have been given up to six months to notify the FCA of changes to statements of responsibilities and management responsibilities maps, and the period for updating the directory of certified and assessed persons has been extended from seven to 20 working days for most updates.
• Responding to Requests. The FCA has issued guidance reducing the period for firms to respond to regulatory reference requests from six to four weeks.

Other reforms will take effect on 10 July 2026. These include allowing SMF18s (i.e., the “Other Overall Responsibility Function”) at solo-regulated firms to hold any prescribed responsibility and raising certain financial thresholds for “enhanced” SM&CR firm status by 30%, with a new five-year mechanism for future threshold adjustments. The FCA will also remove the need for firms to certify individuals to perform multiple overlapping certification functions, a change estimated to reduce the total number of certification roles by approximately 15%.

Phase Two: Looking Ahead

More substantial reforms are anticipated under Phase Two, which will require amendments to primary legislation. HM Treasury has confirmed that it intends to remove the Certification Regime from the Financial Services and Markets Act 2000, empowering the FCA and PRA to introduce rules to replace it. The Government also proposes to reduce the number of senior management functions requiring regulatory pre-approval and to remove legislative requirements concerning statements of responsibility. The FCA has indicated that it expects to consult on the Phase Two rule changes before the end of 2026.

These reforms represent a helpful and commercial step towards a more proportionate and streamlined accountability regime. Firms should take immediate stock of the new flexibilities available under Phase One, while preparing for the more wide-ranging structural changes that Phase Two is expected to deliver.

The FCA and PRA policy statements are available here and here respectively and HM Treasury's consultation response is available here.