SM&CR Reforms 2026: A Practical Guide to PS26/6

In April 2026, the Financial Conduct Authority published its Policy Statement PS26/6, setting out the first phase of reforms to the Senior Managers & Certification Regime (SM&CR).

The changes are intended to make the regime more efficient and proportionate, while maintaining strong individual accountability. Importantly, the FCA has made clear that the SM&CR is not being replaced or weakened. Instead, the focus is on refining the regime so that it works more effectively in practice and reduces unnecessary administrative burden for firms.

For firms seeking SM&CR support or reviewing their FCA compliance framework, these reforms provide a clear opportunity to reassess governance arrangements, clarify responsibilities, and ensure that SM&CR processes reflect how the business actually operates.

What the FCA Reviewed and Changed

The FCA’s review of SM&CR followed industry feedback that, while the regime is effective, certain aspects, particularly approvals, certification, and ongoing administration, can be overly complex and resource-intensive.

As a result, the FCA has introduced targeted changes aimed at improving efficiency without reducing accountability. These changes are practical in nature and focus on specific areas where firms have experienced friction.

Key areas of reform include:

• Criminal records checks

• The 12-week rule for Senior Manager appointments

• Guidance on Senior Management Functions (SMFs)

• Allocation of Prescribed Responsibilities (PRs)

• Statements of Responsibilities (SoRs)

• Definition of “significant changes”

• Directory reporting requirements

While each of these changes is relatively targeted, together they represent a broader shift toward a more streamlined and workable SM&CR framework.

Criminal Record Checks: A More Practical Approach

One of the more straightforward changes relates to criminal records checks (CRCs). The FCA has extended the validity period from three months to six months and removed the requirement for checks where individuals are moving internally or within the same group.

This change will reduce duplication and ease administrative pressure, particularly for firms with more complex group structures or higher levels of internal movement. However, this does not reduce the importance of fitness and propriety assessments, and firms must still ensure that individuals are assessed appropriately on an ongoing basis.

The 12-Week Rule: Operational Flexibility

The reform of the 12-week rule is one of the most impactful changes from a practical perspective.

Under the updated approach, firms now have 12 weeks to submit an SMF application, rather than being required to obtain approval within that timeframe. Individuals can begin performing the role while the application is under review, and the Senior Manager Conduct Rules will apply during this period.

This change addresses a common operational challenge for firms, particularly where there are unexpected departures or delays in the approvals process. It allows firms to maintain continuity in senior roles without breaching regulatory expectations.

SMFs and Prescribed Responsibilities: Greater Clarity

The FCA has also introduced additional guidance on the application of Senior Management Functions (SMFs) and the allocation of Prescribed Responsibilities (PRs).

In practice, this is intended to help firms take a more considered approach to how responsibilities are assigned. In some cases, responsibilities may be shared or split, but the FCA expects firms to ensure that accountability remains clear and defensible.

Stronger governance structures will clearly demonstrate:

• Who is responsible for each key area

• How responsibilities are divided where more than one individual is involved

• How oversight and accountability are maintained

Where this is not clearly defined, firms may face challenges in demonstrating effective governance.

Statements of Responsibilities: Keeping Records Accurate

The FCA has clarified its expectations around Statements of Responsibilities (SoRs), with a focus on ensuring that they remain accurate while reducing unnecessary reporting burden.

Firms are required to update SoRs as soon as a significant change occurs and ensure that internal records are kept up to date at all times. However, there is now more flexibility in when these updates need to be submitted to the FCA. In some cases, firms may submit updates periodically rather than immediately.

This approach strikes a balance between maintaining accurate records and avoiding excessive administrative processes.

Significant Changes: Clearer Expectations

The FCA has refined its guidance on what constitutes a “significant change” in a Senior Manager’s role. This is an important area, as it determines when firms must update SoRs and consider regulatory notifications.

Examples of significant changes include:

• Changes in reporting lines or seniority

• Taking on responsibility for new areas of the business

• Material changes in the nature of the role or required expertise

This additional clarity should help firms apply a more consistent approach when assessing whether updates are required.

Directory Reporting: Timely and Accurate

The FCA has also clarified expectations around Directory reporting, including the timeframes for submitting updates.

Firms are required to report changes within:

• 7 business days in certain cases

• 20 business days in others

The FCA has emphasised that timely reporting improves the accuracy of the Directory and supports better regulatory oversight

As a result, firms should ensure that internal processes between HR and compliance functions support prompt reporting.

Key Themes from the FCA Reforms

Across all of the changes, a number of consistent themes emerge. The FCA is not reducing expectations around accountability, but it is encouraging firms to adopt a more practical and proportionate approach.

Key themes include:

• Reducing unnecessary administrative burden

• Focusing on how governance works in practice, not just on documentation

• Ensuring responsibilities are clearly defined and understood

• Maintaining accurate and up-to-date records

• Supporting flexibility in how firms manage senior roles

These themes reinforce the importance of a regulatory compliance framework that is workable and reflects the day-to-day running of the business.

What Should Firms Do Now

Firms should use these reforms as an opportunity to review their SM&CR framework and identify any gaps or inefficiencies.

In practice, this may involve:

• Reviewing SMF roles and ensuring responsibilities are clearly defined

• Updating Statements of Responsibilities and governance documents

• Assessing whether Prescribed Responsibilities are allocated appropriately

• Strengthening internal processes for identifying significant changes

• Ensuring Directory reporting timelines are met

• Reviewing the compliance monitoring plan to ensure SM&CR is adequately covered

For many firms, this will involve stepping back and assessing whether their current framework reflects how responsibilities are actually carried out in practice.

How Compliance Angle Can Help

The FCA’s SM&CR reforms highlight a common issue across the industry: firms often have the right structures in place, but these are not always implemented effectively or maintained over time.

For firms looking for SM&CR support, Compliance Angle provides hands-on, practical assistance tailored to your business model and regulatory obligations.

We support firms with:

• FCA authorisation support and FCA application support, including building SM&CR frameworks from the ground up

• Development of compliance monitoring frameworks and compliance monitoring plans to support effective oversight

• Compliance gap analysis and regulatory health checks to identify governance weaknesses and provide clear remediation steps

• Ongoing compliance advisory and outsourced compliance support, including SM&CR support and dedicated Board and Senior Manager support.

Our focus is on helping firms implement governance arrangements that are clear, proportionate, and effective in practice.