The UK’s Senior Managers and Certification Regime (SM&CR) may be on the cusp of its most far-reaching overhaul since launch.

On 22 October 2026, the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) released their Phase 2 consultations, CP26/37 and CP14/26, setting out plans to cut administrative load, simplify compliance and hand firms more flexibility.

According to Star Compliance, the headline proposal is the removal of the Certification Regime, accompanied by changes to Senior Manager approvals, reporting and responsibility documentation. Yet the fundamentals of competence, suitability and conduct would stay firmly in place.

Nothing is settled yet. Responses are due by 22 January 2027, and implementation could begin in the second half of 2027, depending on final regulatory decisions, legislation and HM Treasury commencement arrangements. Until then, existing SM&CR rules apply in full.

Under the FCA’s plans, annual Certification and the FCA Directory would be scrapped, although competence, suitability and relevant qualification and training rules would continue. Regulatory references would still be required for Senior Manager candidates.

Some Senior Manager roles would shift from approval to notification, Prescribed Responsibilities would be trimmed, and Statements of Responsibilities and Management Responsibilities Maps would be simplified, with firms largely keeping records internally.

Mandatory Conduct Rules training would give way to employee notification requirements, and breach-reporting thresholds would narrow. The FCA proposes a 14-month reporting period for most non-SMF staff covered only by the Individual Conduct Rules, while relevant PRA reporting would stay within seven business days. The FCA’s temporary cover period would extend from 12 to 18 weeks, and certain Enhanced regime thresholds would rise by about 50%.

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