FCA Proposes Sweeping SM&CR Overhaul, Ending Certification for 139,000 Staff
The UK’s Financial Conduct Authority (FCA) has proposed a sweeping overhaul of the Senior Managers and Certification Regime (SM&CR), aiming to end certification requirements for 139,000 staff members.
The new proposals would replace the current certification regime with a simpler, more targeted approach. This would apply to firms regulated by the FCA, the Prudential Regulation Authority, and the Pensions Regulator.
Under the current rules, firms must certify the competence of their staff, a process that involves annual assessments and detailed reporting. The FCA argues that this process is overly burdensome and that a more flexible system would be more effective.
New Regulatory Framework
The proposed framework would introduce a new, more flexible approach to staff oversight. This would be based on a firm’s own internal governance and risk management systems, rather than a one-size-fits-all certification process.
Industry Reactions
The financial services industry has largely welcomed the proposed changes. Many firms have long argued that the current certification regime is overly complex and costly, and that a more streamlined approach would allow them to focus on their core business.
However, some industry groups have expressed concern that the new framework could lead to a reduction in the quality of staff oversight. They argue that the FCA’s new approach may not be as effective at preventing misconduct.
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