SMCR Is Evolving – Accountability Still Leads The Way
Over the next 18 to 24 months, the UK’s Senior Managers and Certification Regime (SMCR) is expected to undergo reform. These proposed changes aim to reduce duplication, clarify expectations, and streamline regulatory oversight. While the framework may evolve, its core purpose of promoting individual accountability and strong governance remains unchanged.
What Is SMCR
SMCR was introduced to strengthen accountability in UK financial services. It requires firms to assign clear responsibilities to senior managers, certify the fitness and propriety of employees in key roles annually, and ensure staff comply with conduct rules. The regime also mandates regulatory references and personal accountability, helping to foster a culture of transparency and integrity.
What’s Changing in Phase 1 (2026)
The proposed reforms will occur in two phases – Phase 1 (2026) which are operational and guidance updates within existing legislation and Phase 2 (Post 2026) that are broader structural changes contingent on HM Treasury’s legislative review. The changes are intended to make SMCR more practical and less administratively burdensome, without weakening regulatory standards. Core obligations around data quality, employee oversight, and recordkeeping remain firmly in place.
Key areas of proposed changes in Phase 1 include:
- Streamlined Certification: Potential removal of duplicate certifications for individuals with overlapping roles
- Improved Guidance: Clearer expectations for handling conduct breaches and regulatory references
- Extended Timelines: Greater flexibility for submitting Statements of Responsibilities and directory updates to the regulator
What’s Next – Automation & Data is Still King
As these reforms take shape, the need for reliable data and automated processes becomes even more important. Longer timelines for regulatory submissions do not lessen the expectation for accuracy or control; if anything, they raise the bar for firms to get it right.
While Phase One of the reforms may reduce duplication and offer more flexibility, the core responsibilities remain the same. For example:
- Requirements for the Financial Conduct Authority Directory are NOT changing, and firms must continue to maintain structured, accurate data ready for submission.
- Management Responsibilities maps and Statements of Responsibilities must still be maintained daily as ‘living documents,’ even if the cadence changes for submitting them to the regulator.
- Certification and Fitness & Propriety records must still be documented and defensible, even if certain redundancies are removed.
- Conduct oversight also remains essential. Annual attestations, role-specific training, and breach tracking are still expected. The requirement to document reasonable steps and ensure proper handovers remains in place.
Phase 2 Changes May Be Big, But They Are Still Years Away
The next phase of SMCR reform proposes significant changes, including fewer roles requiring pre-approval, the possible removal of the Certification Regime, and a replacement for the Directory. These changes require legislation and depend on a review by HM Treasury. There is no confirmed timeline, but mid 2027 is the earliest likely implementation.
That is a long time to operate with manual or inefficient processes. The FCA has a history of delays, and firms must stay compliant today, not just in the future.
StarCompliance (Star) has a strong record of adapting to regulatory change. Whether the Certification Regime and Directory are replaced or restructured, our platform will evolve. Firms that implement Star now will be in a much stronger position to respond quickly and confidently when the new rules arrive.
Ongoing Commitment
At Star, we understand the challenges that come with managing regulatory frameworks like SMCR. For more than two decades, we’ve worked with firms across the UK and around the world to navigate evolving requirements and implement scalable, practical solutions that support accountability and trust. In addition to Star’s SMCR solution, the fully integrated Individual Accountability solution extends to IAF in Ireland, IAC in Singapore and FAR in Australia.
“As regulations continue to develop, our commitment remains the same: to deliver technology that simplifies complexity and helps firms stay aligned with regulatory expectations in the UK and around the world. Our solutions are designed to reduce manual effort, create reliable systems of record, and provide the clarity that regulators demand.” – Andy Atkinson, Director, Product Management
Key attributes of the Star platform include:
- Structured Data for Regulatory Submissions
Star automatically formats directory data to align with FCA templates, saving time and reducing the risk of error.
- Centralized Certification Management
A single location to track and maintain all certification records, ensuring documentation remains consistent and accessible, even as requirements shift.
- Comprehensive Conduct Oversight
Star supports consistent documentation of conduct breaches, regulatory references, and related concerns, all within a centralized, auditable system.
- Time-Saving Automation
Automation simplifies key workflows such as certification reviews, training tracking, and handover documentation, reducing administrative burden.
- Efficient Training and Declaration Tracking
Role-specific training and annual declarations can be recorded and managed in one place, removing reliance on shared folders or spreadsheets.
- Support for Reasonable Steps and Handovers
Star streamlines the recording of these ongoing obligations, making it easier for firms to demonstrate compliance and continuity.
- Reliable Data Management
With increased regulatory focus on data quality, Star ensures firms have timely access to accurate, well-organized information.
Star partners with firms to manage essential compliance activities from certification, conduct to oversight, within a secure and centralized environment. This allows compliance teams to work more efficiently and consistently while focusing on their core responsibility: upholding accountability and reinforcing good governance.
SMCR may be evolving, but the need for smart, purpose-built compliance technology remains unchanged. Star is here to support firms at every step of the journey. To learn more about Star’s SMCR solution click [HERE].
Buyer’s Guide To SMCR Solutions
