In July 2025, the FCA and Prudential Regulation Authority (PRA) confirmed a series of proposed changes to the Senior Managers & Certification Regime (SM&CR). The aim is to make the regime more efficient whilst still maintaining a high standard of conduct and accountability.
Thistle works closely with firms across the financial services sector to implement, review, and embed SM&CR requirements in a proportionate and practical way. These changes reflect many of the challenges we see firms navigating in practice, particularly during periods of growth, restructuring, or leadership change.
Below, we explore the proposals and what they mean for regulated firms.
What's Changing Under the SM&CR Reforms?
- More Time and Flexibility for Applications
- No More Duplicate Certifications
- Extended Timelines for Notifications
- Longer Validity Period for DBS Checks
- Clarified SMF Role Definitions
- Improved Fit and Proper Guidance
- More Flexibility for Temporary Appointments
- Easier Updates to the FCA Directory
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More Time and Flexibility for Applications
Firms will now have longer windows to submit applications for new senior managers, especially during unexpected or temporary changes. This will allow for greater flexibility in managing senior-level changes without triggering avoidable compliance breaches. -
No More Duplicate Certifications
Firms will no longer need to issue separate certificates for individuals performing multiple identical roles, helping to streamline processes and (it is anticipated) reduce the overall volume of certification by approximately 15%. -
Extended Timelines for Notifications
Firms are being given extra time to notify the regulators of changes to senior manager responsibilities. This allows firms to manage handovers or restructures without facing undue pressure on reporting requirements. -
Longer Validity Period for DBS Checks
The duration for DBS checks remaining valid before submission will be extended. This proposal will enable firms to avoid increased costs in repeatedly having to process new DBS checks. -
Clarified SMF Role Definitions
The reforms will include better definitions as well as guidance on senior management functions in order to reduce ambiguity around how they are categorised. - Improved Fit and Proper Guidance
The FCA and PRA are proposing to enhance the guidance currently available to firms on conducting annual fit and proper assessments. This will allow firms to navigate this core obligation with more efficiency and have a consistent approach to follow.
7. More Flexibility for Temporary Appointments
The FCA will be granting more leniency in the event of a temporary appointment being required for a firm. This will provide firms with longer windows in submitting applications for new senior managers, especially in the event of an unexpected or temporary change.
8. Extended Updates to FCA Directory
Firms will be given the opportunity to update the FCA Directory of certified staff with reduced time constraints. This will enable firms to update the FCA Directory in a more efficient and accurate manner.
What This Means for Firms
Whilst the above proposals are promising, the FCA has emphasised that the purpose of SM&CR remains pivotal. The reforms proposed are not intended to reduce the regime’s effectiveness, but rather to remove unnecessary requirements that may hinder growth for firms and therefore disadvantage consumers.
How Thistle Initiatives Can Help
Thistle Initiatives supports firms in adapting to regulatory change. We help review SM&CR functions, update internal processes, and prepare for regulatory submissions in line with the proposed reforms.
If you’d like to discuss how these changes could affect your firm’s SM&CR obligations, please get in touch.
Meet the Expert
Anisha Kalam, Senior Consultant 
Anisha is a compliance specialist with over six years of experience in financial services, specialising in FCA regulations and OFSI sanctions. She has successfully implemented global compliance programs, introduced cost-saving monitoring systems, and ensured adherence to regulatory requirements.
Anisha's expertise spans sanctions analysis, regulatory risk mitigation, policy drafting, and compliance audits. With a proven track record in reducing compliance risks and managing high-stakes regulatory projects, she brings technical precision and leadership to every role.