FCA SM&CR Review: More Proportionate, Still Accountable
The FCA and PRA’s latest review of the Senior Managers & Certification Regime (SM&CR) signals a clear shift in regulatory direction. The regulator is not stepping back from accountability. Instead, it is trying to reduce operational friction and administrative duplication while maintaining strong governance and individual responsibility.
For UK financial services firms, this is not simply a compliance housekeeping exercise. It is another indicator that the FCA expects firms to become increasingly data-driven, digitally evidenced and operationally efficient in how they supervise people, controls and conduct.
The review confirms that SM&CR remains effective, but processes around approvals, certification and ongoing administration can be streamlined without weakening accountability.
Key themes firms should focus on
1. Reduced administration, not reduced accountability
The FCA is introducing “Phase 1” reforms designed to make SM&CR more efficient and proportionate.
Changes include:
- Extending criminal records check validity from 3 to 6 months
- Allowing firms 12 weeks to submit Senior Manager applications rather than waiting for approval
- Giving firms up to 6 months to update Statements of Responsibilities (SoRs) and Management Responsibilities Maps (MRMs)
- Simplifying certification administration
- Extending Directory Person update periods from 7 to 20 working days
These changes reduce operational burden, but firms still need clear governance, oversight and evidential audit trails.
The FCA is effectively saying: spend less time on manual administration and more time on effective supervision.
2. SM&CR becomes increasingly data and evidence led
One of the most important themes within the review is the regulator’s emphasis on consistency, clarity and operational effectiveness.
That creates pressure on firms still relying on spreadsheets, fragmented systems and manually collated oversight records.
The requirement to maintain accurate SoRs, PR allocations, certification records, conduct rule breaches and governance evidence remains significant. The difference is that firms now have more flexibility in how they administer it.
This strongly favours firms deploying RegTech and supervision technology.
How Model Office supports SM&CR compliance
Model Office enables firms to operationalise SM&CR obligations through structured governance, automated oversight and evidence-based compliance management.
Key capabilities include:
- Automated governance, risk and compliance dashboards aligned to SM&CR accountability structures
- Centralised oversight of Senior Managers, Certification staff and conduct rule monitoring
- Automated audit workflows evidencing supervisory activity and management oversight
- AI-driven compliance document audits against FCA requirements and internal policies
- Automated Training & Competence monitoring and KPI reporting
- Structured Management Information (MI) and board reporting to evidence ongoing governance effectiveness
- Full audit trails across remediation actions, attestations and supervisory interventions
- Integration with existing CRM and operational systems to reduce duplicated administration
As firms move to six-monthly SoR and MRM submissions, maintaining accurate live internal records becomes even more important. The operational risk now shifts from submission frequency to data quality and governance control.
This is where supervision technology becomes strategically important.
3. Greater proportionality across the regime
The FCA is also increasing certain Enhanced SM&CR thresholds by 30% and introducing a five-year review mechanism.
This reflects a broader regulatory trend toward proportionality.
However, proportionality should not be confused with lighter supervision expectations. The FCA continues to expect firms to demonstrate:
- Clear accountability structures
- Strong systems and controls
- Effective conduct management
- Ongoing competency assessment
- Evidenced governance oversight
The regulator is increasingly focused on outcomes, operational resilience and the quality of supervisory evidence available within firms.
Final observation
The latest SM&CR review reinforces the FCA’s wider direction of travel across Consumer Duty, operational resilience, governance and AI-enabled supervision.
Firms that continue to operate fragmented manual oversight models will increasingly struggle with scalability, evidencing accountability and regulatory responsiveness.
The firms that adapt quickest will be those deploying integrated RegTech and supervision platforms capable of delivering real-time governance oversight, structured MI and consistent regulatory evidence across the business.
Please click the below icon to learn more about MO RegTech today..
