The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have proposed plans to cut red tape on the Senior Manager Certification Regime (SM&CR) as part of upcoming reforms.

The SM&CR holds individual senior managers in financial firms accountable for their conduct and competence.

The move comes as the government consults on legislative changes to the regime, including removing the Certification Regime and increasing flexibility for the regulators to reduce the number of senior management functions (SMFs) which require pre-approval.

The proposals by the UK financial watchdogs aim to streamline the regime, making it less onerous on firms.

They include plans to give firms more time and flexibility to submit applications for approving new senior managers when there has been an unexpected or temporary change. Additionally, the regulators suggest there should be more time for firms to report updates to senior manager responsibilities and update the directory, which lists certified staff.

As well as this, the regulators propose to remove duplication where the same individuals are certified for separate functions, which would reduce the number of certification roles by 15 per cent.

Additionally, the authorities have proposed guidance on how to streamline the annual checks firms need to undertake to certify individuals are ‘fit and proper’ to do their role and an increase on how long criminal record checks for senior manager applications are valid for prior to application submission.

“Integrity and accountability at the top matter, which is why there is widespread support for the Senior Managers and Certification Regime," said Nikhil Rathi, FCA chief executive. "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.”

Sam Woods, chief executive of the PRA and deputy governor for prudential regulation at the Bank of England said that the move would reduce the burden of senior managers and the Certification Regime without "diluting accountability".

The regulators are running a consultation for the proposals which will close on 7 October 2025.

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