UK regulators propose cutting 139,000 annual staff certifications while retaining CEO approvals

The Financial Conduct Authority and Prudential Regulation Authority have proposed a major simplification of Britain's Senior Managers and Certification Regime, including removal of annual certification requirements affecting approximately 139,000 individuals below senior-manager level. The proposals were announced on 22 October and remain under consultation. For brokerages, the significance lies in changing compliance workflows and appointment approvals, not in removing responsibility for employee competence or misconduct.[1]

Under the proposed structure, certain functions that currently need regulator pre-approval would move to a notification model, with firms remaining responsible for assessing candidates' fitness and propriety. Senior roles such as chief executives, chief financial officers and chairs would retain pre-approval requirements. The regulators also propose streamlining conduct-rule training and raising the threshold for reporting breaches involving most staff below senior-manager level.[1]

The regulators estimate that the changes could save firms around £2 billion over ten years. That is a projected burden reduction, not money already saved, and it aggregates expected effects across the relevant sector rather than promising a saving to any individual broker. The PRA suggests its own volume of senior-manager pre-approvals could fall by 43%. These estimates relate to different populations and must not be summed as if they measure the same headcount or expense.[1]

Some reforms depend on legislation and subsequent supervisory rules. That matters for firms tempted to discontinue annual certifications or alter hiring processes in advance of legal implementation. At the time of the consultation, existing duties continue to apply. A proposal to remove a particular filing does not excuse a brokerage from verifying that dealing staff, client advisers and managers remain suitably trained and supervised.[1]

The economic argument for simplification is that compliance teams may spend less time repeating administrative certifications and more time examining substantive conduct risks. That outcome will depend on how firms redesign controls: a missing annual form is not evidence of a missing competence review, but removing forms without another record could weaken a firm's ability to demonstrate adequate oversight.[1]

The proposed SM&CR changes remain a consultation, not an automatic elimination of individual accountability. The FCA and PRA estimate that removing annual certification checks for approximately 139,000 staff and streamlining other requirements could save the financial sector roughly £2 billion over a decade. Those are regulator forecasts dependent on adoption, not savings already realised. Senior-manager approvals and other duties would continue, and some reforms require legislation. Firms commenting before the 22 January 2027 deadline should compare their existing control inventories, people in scope, recurring verification workload and how misconduct will still be documented and escalated.[1]

Consultation responses are due by 22 January 2027, with policy expected after the consultation and any necessary legislation. Broker groups should map the proposed role-by-role changes against their particular FCA and PRA permissions, retain current processes until changes take effect, and focus proposed savings on the exact activities regulators intend to remove.[1]

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