The FCA and PRA opened Phase 2 consultations on 22 October to simplify the Senior Managers and Certification Regime. The proposals would remove annual certification requirements affecting around 139,000 people below senior-manager level and replace regulator pre-approval with notification for selected senior functions.[1]
Proposed responsibilities
| Area | Change | Retained safeguard |
|---|---|---|
| Certification Regime | Remove annual certification and associated register administration | Firm duties on employee competence and conductSource 1Source 3 |
| Chief actuaries and selected risk/audit committee chairs | Move specified functions to notification | Firm fitness assessment; regulator can require approval in higher-risk casesSource 1Source 3 |
| CEOs, CFOs and chairs | Continue pre-approval | Fit-and-proper assessment before appointmentSource 1Source 3 |
| Conduct reporting and training | More proportionate requirements for most staff below senior-manager level | Serious misconduct and conduct standards remain in scopeSource 1Source 3 |
The joint announcement estimates around £2 billion in savings over ten years. The PRA’s own cost-benefit analysis separately forecasts 43% fewer pre-approval applications in its population and central annual compliance savings of £11.5 million. Those PRA measures should not be presented as the combined FCA/PRA percentage or the same economic estimate.[1][3]
Consultation and implementation timetable
| Milestone | Status |
|---|---|
| Phase 2 consultations | Opened 22 October 2026Source 2Source 3 |
| Responses | Due 22 January 2027Source 2Source 3 |
| FCA policy statement | Expected first half 2027Source 2Source 3 |
| Implementation | Dependent on legislation and final rules; existing obligations continue meanwhileSource 2Source 3 |
The changes build on Phase 1 rules published in April 2026. They would alter governance administration across regulated firms, including brokers, while leaving employers responsible for staff standards. The consultation does not authorise firms to stop certification now.[2][3]
Sources & further reading
- Regulators unveil plans to simplify Senior Manager and Certification Regime Bank of England / PRA and FCA · 22 Oct 2026 · Accessed 26 Oct 2026
- CP26/37: Senior Managers and Certification Regime review, Phase 2 Financial Conduct Authority · 22 Oct 2026 · Accessed 26 Oct 2026
- CP14/26: Review of the SM&CR, Phase 2 Prudential Regulation Authority · 22 Oct 2026 · Accessed 26 Oct 2026