Europe: UK consultations on reducing the burden of the FCA senior managers regime

By: Zainab Kuku, Philip Morgan, and Andrew Massey

As part of the UK government’s strategy to boost the competitiveness of the UK financial services sector and support growth, the overall burdens of the Senior Managers & Certification Regime (SMCR) are to be reduced “by 50%”.

In pursuit of this, the UK government is consulting on amendments to legislation to, amongst other changes, (i) remove the existing certification regime and empower the FCA to replace it with a more flexible and proportionate regime, and (ii) provide the FCA with greater flexibility to define senior manager functions, and to create a class of senior managers for whom prior FCA approval is not necessary.

Meanwhile, the FCA is proposing to streamline SMCR processes including:

• clarifying and simplifying the documentation and forms required for senior manager applications, particularly the Form A;
• for senior manager replacements, amending the 12-week rule so that the application for FCA approval would need to be submitted within 12 weeks, but approval would not need to be received within that timescale (NB. the current 12-week rule permits firms to appoint an individual to cover for a senior manager for up to 12 weeks without regulatory approval where the absence is temporary or reasonably unforeseen);
• replacing the requirement to submit statements of responsibilities to the FCA following any significant change with a requirement to file periodically and no later than every six months after the last submission;
• increasing the validity period of criminal record checks from three months to six months; and
• shortening the timeframe for providing regulatory references from six weeks to four weeks.

Both consultations close on 7 October 2025. The FCA is anticipating proposing further changes once the consultation on the legislation has progressed.

Whilst the 50% figure seems arbitrary and difficult to measure, the aim of simplifying SMCR is welcome.