Senior Managers and Certification Regime

The FCA and Prudential Regulation Authority (PRA) cut certification roles under SM&CR by 15% on 22 April 2026, phase one of a joint 50% reduction target, in what regulators describe as the first substantive rollback of the regime since its extension to all authorised firms in 2019. SM&CR had been the single largest regulatory overhead for small authorised fintech firms.

SM&CR is the UK financial-services accountability regime requiring banks, insurers, and FCA-authorised firms to identify senior managers personally responsible for specific business functions, register them with the regulator, and annually certify that employees performing significant-harm functions are fit and proper. It was originally introduced in 2016 for banks and major investment firms following the 2008 financial crisis, then extended to nearly all ~50,000 FCA-authorised entities in 2019, bringing fintechs, wealth managers, and smaller brokers within scope for the first time.

The April 2026 cut shifts the UK away from the post-2008 accountability-first posture towards a lighter-touch regime explicitly designed to reduce compliance drag on smaller firms. The policy tension is sharp: regulators argue the reduction is risk-based and targets roles where individual accountability adds limited safety value; critics warn that cutting the certification population weakens the individual-accountability principle the regime was designed to embed after a decade of mis-selling and systemic failures.