The FCA has published PS26/6, setting out its Phase 1 reforms to the Senior Managers & Certification Regime (SM&CR). Published on 22 April, the policy is intended to make the regime more efficient and proportionate.
The majority of the changes take effect on 24 April 2026, further changes are to follow on 10 July 2026. Certain Code of Conduct (COCON) amendments aligned to the FCA’s non-financial misconduct reforms, taking effect on 1 September 2026.
On balance, this is not viewed as a relaxation of SM&CR. The UK regulator has removed some repetitive administrative requirements, but it expects firms to know who is accountable and to escalate serious matters promptly. This is particularly important for firms with small UK management teams, group-led oversight, or fast-changing operating models.
Key Implementation Dates
April 2026 Requirements
Applicable to All SM&CR Firms
From 24 April 2026, criminal record checks will now have a six-month validity period (rather than three months) and will no longer be required for certain internal or intragroup moves.
The 12-week rule is more practical. Firms now have 12 weeks to submit a Senior Management Function (SMF) application, rather than 12 weeks to submit and obtain approval. If a valid and complete application is made within that period, the temporary appointee may remain in the role until the FCA determines the outcome of the application.
The Senior Manager Conduct Rules apply to that individual, and the FCA has made clear that firms should use this flexibility reasonably, infrequently, and alongside effective succession planning and prompt, good-quality applications.
Updated Statements of Responsibilities (SoRs) and (where relevant) Management Responsibilities Maps (MRMs) may now be notified within six months, and firms only need to submit the latest version if several changes were made in the period.
Ambiguity has been removed by confirming that certificates may be issued digitally, recertification may sit within annual appraisal cycles, and annual reassessment may be more proportionate where nothing material has changed.
The deadlines to update the FCA Directory of Certified and Assessed Persons will move from seven to 20 working days, however staff departures remain subject to the seven business-day deadline.
Regulatory references should now be provided within four weeks (instead of six), and the FCA has clarified what may need to be disclosed where an individual leaves before a misconduct investigation is concluded.
The FCA has clarified that conduct rule breaches by individuals who are not SMF managers but are performing an SMF role should be reported via formal reporting channels (i.e. the FCA’s supervisory notification rules) as soon as practicable. These should not be reported on a collated annual basis, and they will not need to be included in the firm’s annual conduct breach report where the matter has already been reported to the FCA.
Additional guidance is also provided on Prescribed Responsibilities, including when they may be split and when they may appropriately sit with an SMF not listed in the guidance, where that person is the most senior employee or officer responsible for the relevant area.
For enhanced scope SM&CR firms that rely on group finance, technology, or human resources functions, the expanded guidance for the Group Entity Senior Manager Function (SMF7) is useful because it draws a clearer line between group influence and a function performed on behalf of the firm.
Enhanced Scope for Banking, Solvency II, and Overseas SM&CR Firms
The FCA has also provided additional rules and guidance on the scope of the SMF7 (confirming that this function is not the same as the Prudential Regulation Authority (PRA)-prescribed senior management responsibility (SMF7)), the SMF18 (“Other Overall Responsibility”), and SMF22 (“Other Local Responsibility”) functions, confirming that neither an SMF18 or SMF22 holder needs to hold equal status to executive directors, and has reiterated that these roles should sit with individuals in the top layer of the firm’s executive management.
July 2026 Requirements
With effect from 10 July 2026, holders of the SMF18 at solo-regulated firms may hold any Prescribed Responsibility.
The FCA will also raise certain enhanced SM&CR thresholds in line with inflation. This includes:
- Assets under management threshold from £50 billion to £65 billion
- Intermediary regulated business revenue from £35 million to £45 million
- Regulated consumer credit lending revenue from £100 million to £130 million.
A five-year consumer priced index-based adjustment mechanism will follow, with no downward adjustments. At the same time, overlapping certification roles will be removed, and the FCA will update the directory to reflect that change.
Actions Firms Should Take Now
To respond effectively, firms should focus on the following areas:
- Refresh succession plans: Identify interim and permanent cover for each SMF and define how the application process will be managed ahead of any departure.
- Rebuild reporting workflows: Align compliance, HR, legal, and operations with regulatory notifications, the new Directory deadlines, and the four-week regulatory reference timeframe.
- Keep internal records live: Treat the six-month filing window as a benefit, but not a reason to let SoRs or MRMs drift internally.
- Simplify certification: Move to digital certificates and embed recertification into existing appraisal review cycles.
- Update internal policies and SM&CR training materials: Ensure they reflect the new requirements and guidance.
- Review scope: Enhanced SM&CR firms should review the new thresholds, SMF7 and SMF18 roles, and Prescribed Responsibility allocations, as well as where relevant, the implications for any SMF22 function-holders. Dual-regulated firms should also review the Prudential Regulation Authority’s statement.
Phase Two
Phase one is not the end of the story. In PS26/6, the FCA says that it expects to consult on phase two later in 2026. His Majesty’s Treasury has now published its consultation response and says it intends to introduce primary legislation as soon as parliamentary time allows.
That package would remove the Certification Regime from Financial Services and Markets Act 2000, which would be a bold step towards meeting the FCA and PRA’s ambition to reduce the regulatory burden of SM&CR by 50% (as set out in last year’s Financial Services Growth and Competitiveness strategy). It would also give regulators more flexibility to reduce the number of senior management roles requiring pre-approval, repeal prescriptive legislative provisions on Statements of Responsibilities, and streamline Conduct Rules requirements at a legislative level. Phase one should be implemented in a way that leaves room for further change in phase two.
SM&CR Compliance Support for FCA-Regulated Firms
ACA supports firms in implementing and strengthening SM&CR frameworks and evidencing accountability in practice, including:
- Framework review and remediation: Review and strengthen Statements of Responsibilities, Management Responsibilities Maps, fitness and propriety assessments, and regulatory references, and support Form A preparation.
- Conduct Rules and breach reporting: Support reporting and help embed effective Conduct Rules frameworks across the firm.
- Reasonable steps and accountability: Support documentation and governance arrangements to evidence senior manager accountability and oversight.
- Training: Deliver SM&CR and Conduct Rules training, including annual updates, certification staff training, and tailored workshops.
- Technology enablement: Support oversight and monitoring through ACA’s ComplianceAlpha platform, helping firms evidence conduct, risk, and accountability across the business.
If you are considering how to strengthen SM&CR frameworks in light of these changes, ACA can help.