Europe: Here’s Your Chance to Improve the UK’s Senior Managers and Certification Regime

By Samuel Gordon

The FCA, PRA and UK Government are looking for feedback by 1 June 2023 to guide potential changes to the Senior Managers and Certification Regime (SMCR), the UK’s regime designed to improve individual accountability and conduct standards of (mostly) senior personnel in financial services firms. To this end, the FCA and PRA jointly published a discussion paper on 30 March and HM Treasury published a call for evidence.

It seems clear that it is the regulators’ and Government’s view that SMCR has broadly been a success in driving up standards of conduct and embedding an accountability culture. So any changes to come would seem likely to address details of the way SMCR operates in practice, rather than more fundamental questions as to whether it, or significant aspects of it, are needed at all.

The papers note that the regulators and Government are already aware of a number of stakeholder concerns. These include:

  • the difficulty of completing regulatory references;
  • the frequency of submitting SMCR information;
  • delays in obtaining approvals (although the papers note that this point is being addressed and has already improved in recent months);
  • compliance requirements for authorising the appointment of new senior managers;
  • the breadth of the certification regime and the frequency of fit and proper certifications;
  • differing levels of scrutiny applied to different firms; and
  • the interaction of the SMCR with other regulatory regimes.

We note that the call for evidence places an emphasis on ways to improve the attractiveness and international competitiveness of the UK, and to ensure that “high standards for regulation are delivered in a way that does not create unnecessary or disproportionate compliance burdens”. The Government also believes in taking an open-minded approach to learning from other international regimes, and solicits contributions from international firms on experiences of similar regimes internationally.

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