FCA and PRA confirm Senior Managers Regime reforms: faster approvals, less duplication

The Financial Conduct Authority and Prudential Regulation Authority today confirmed a package of changes designed to streamline the Senior Managers and Certification Regime (SMCR). Published as a joint press release at the FCA News feed this morning, the reforms target duplication in dual-regulator reporting, approval-process delays, and scope that the regulators now accept had pulled less-material senior roles into the same process as chief executives.

The announcement is framed as part of the FCA's 2026/27 work programme emphasis on proportionality and competitiveness — a direction the regulator has signalled throughout 2025 and which firms of all sizes have pressed for in consultation responses.

What the reform package covers

Per the FCA's published positioning, the core aims are threefold: faster approvals for Senior Manager Functions (SMFs), reduced overlap between FCA and PRA reporting for dual-regulated firms, and clearer scope — so that lower-materiality roles no longer sit within the same pre-approval process as the most senior executives.

The regime was introduced in 2016 for banks and extended to all FCA-authorised firms in December 2019. Since then, industry feedback has consistently flagged three frictions: the time taken to process SMF pre-approvals (historically many weeks, sometimes months for complex candidates), the parallel reporting required by FCA and PRA for the same individual, and the number of certification-regime roles captured relative to the regulatory value of certifying them.

Why it matters for regulated firms

For the estimated 51,000 FCA-authorised firms, the practical effect is expected to be faster hiring and lower legal-and-compliance costs around SMF changes. Smaller firms, where a single compliance lead often manages both FCA and PRA reporting, benefit disproportionately: reduced duplication directly lowers cost per approval.

For dual-regulated firms — banks, building societies, insurers, designated investment firms — the reduction in parallel reporting and dual pre-approval steps is more structural. Industry bodies including UK Finance and the ABI have argued for years that the dual-regulator architecture, while fit for purpose in intent, had accumulated administrative layers that the regulators themselves now acknowledge are not proportionate.

What doesn't change

Three points of continuity matter more than the reform itself. First, the Conduct Rules — which cover integrity, due care, cooperation with regulators, and client interest — continue to apply to all certified and approved individuals. Second, personal accountability under the SMF Duty of Responsibility is unchanged. Third, the recently-tightened non-financial misconduct provisions (bullying, harassment, violence as misconduct under the Conduct Rules, applying to non-banks from September 2026) are being implemented in parallel and are not affected by today's package.

The broader regulatory direction

Today's announcement sits alongside other recent FCA moves: simpler short selling rules (16 April), consultation on the UK's cryptoasset regulatory perimeter (15 April), and the second cohort of the AI Live Testing sandbox (21 April). The pattern is a regulator deliberately signalling that 'proportionate' and 'pro-growth' are not synonyms for 'soft' — with enforcement activity on illegal crypto trading announced the same day as today's SMCR reform.

For firms, the practical takeaway is to watch the detailed Handbook rule changes and SUP forms updates that will follow the policy statement. Most firms will see the practical effect in revised approval forms and reporting templates over the coming months, not on day one.

Frequently asked questions

What did the FCA and PRA announce on 22 April 2026?

The FCA and PRA confirmed a joint package of reforms to streamline the Senior Managers and Certification Regime (SMCR). The stated goal is to reduce duplication, speed up approvals, and refocus the regime on the most material senior roles — while preserving the accountability framework introduced after the financial crisis.

Why reform SMCR now?

The FCA has signalled throughout 2025 that its 2025/26 and 2026/27 work programmes would emphasise 'proportionality' and 'growth' alongside consumer protection. Regulated firms, particularly smaller investment managers and insurers, have long argued that SMCR's approval backlogs and dual-regulator reporting impose disproportionate cost relative to supervisory value.

Does this reduce accountability?

Per the FCA and PRA, no — the core responsibilities, conduct rules, and personal accountability remain in force. What's changing is the administrative layering: overlapping pre-approval requirements, repeated reporting under both regimes, and scope creep that pulled less-material roles into the same approval process as chief executives. The thrust is targeted relief, not deregulation.

When do the changes take effect?

Specific commencement dates sit within the FCA and PRA implementation plans accompanying today's statement. Firms should treat the announcement as confirmation of direction rather than an immediate procedural change; most firms will see the practical effect in revised Handbook rules and SUP forms over the coming months, not immediately.