UK regulators propose SM&CR reforms to boost City competitiveness

The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have launched parallel consultations to reform the Senior Managers and Certification Regime (SM&CR). The proposed changes aim to streamline the regulatory framework and reduce bureaucratic burdens on financial institutions.

Key aspects of the reform include the removal of mandatory annual certification for approximately 139,000 non-executive employees and the replacement of prior regulatory approval with a direct notification process for certain strategic roles, such as chief actuaries and chairs of risk and audit committees. While strict approval processes for senior executives like CEOs and CFOs will be maintained, the reforms are projected to save the financial services sector approximately £2 billion over the next decade.

The initiative is designed to foster innovation and investment within the City of London by restoring flexibility to financial firms while preserving individual accountability standards.