Skip to main content Skip to search box Skip to annual report navigation Press X to toggle sticky navigation when activated
Home / Firms / Senior Managers and Certification Regime

Senior Managers and Certification Regime

First published: 
07/07/2015
 Last updated: 02/06/2020

The Senior Managers and Certification Regime (SM&CR) replaced the Approved Persons Regime, changing how people working in financial services are regulated.

Coronavirus (Covid-19): We recognise that firms affected by coronavirus will need to keep their governance arrangements under review. Where we can, we intend to provide flexibility to firms. We have made specific provisions for firms in these circumstances. Read our statements on the SM&CR and coronavirus for dual-regulated and solo-regulated firms for more information.

 

The aim of the Senior Managers and Certification Regime (SM&CR) is to reduce harm to consumers and strengthen market integrity by making individuals more accountable for their conduct and competence.

The SM&CR is a catalyst for change -  an opportunity to establish healthy cultures and effective governance in firms by encouraging greater individual accountability and setting a new standard of personal conduct. 

As part of this, the SM&CR aims to:

  • encourage a culture of staff at all levels taking personal responsibility for their actions
  • make sure firms and staff clearly understand and can demonstrate where responsibility lies

Video: banking leaders' experiences of adopting the SM&CR

Banks came under the SM&CR in March 2016. In this video, senior banking leaders, including Jayne-Anne Gadhia (Virgin Money), Liz Nolan (State Street), Vis Raghavan (J.P. Morgan) and Jon Symonds (HSBC), talk about their experiences of applying the SM&CR to their organisations.
Video transcript: banking leaders’ experiences of adopting the Senior Managers and Certification Regime

Who it applies to

Show information for solo-regulated firms

  • Solo-regulated firms are those regulated by the FCA only. The SM&CR replaced the Approved Persons Regime from 9 December 2019.

Show information for insurers

  • Dual-regulated insurers are those regulated by both the FCA and Prudential Regulation Authority (PRA). The SM&CR replaced the revised version of our Approved Persons Regime and the PRA's Senior Insurance Managers Regime from 10 December 2018.

Show information for banks

  • The SM&CR has applied to UK banks, building societies, credit unions, branches of foreign banks operating in the UK and the largest investment firms regulated by the PRA and the FCA since 7 March 2016.

We have also applied the SM&CR to the FCA and published information about how we’ve done this.

Why regulations have changed

In response to the 2008 banking crisis and significant conduct failings such as the manipulation of LIBOR, Parliament set up the Parliamentary Commission for Banking Standards (PCBS) to recommend how to improve standards in the banking sector.

PCBS recommended a new accountability framework focused on senior management. It also recommended that firms take more responsibility for employees being fit and proper, and that there be better standards of conduct at all levels in banking firms.

Based on these recommendations, Parliament passed legislation in December 2013, leading to the FCA and Prudential Regulation Authority (PRA) applying the SM&CR to the banking sector from March 2016. Parliament made further changes to legislation in May 2016, requiring us to extend the regime to all FSMA authorised firms.