Regulators consult to streamline the SMCR

The FCA, PRA and HM Treasury are working on a range of proposals to refine, clarify and make more flexible the Senior Managers and Certification Regime (SMCR) for the 37,000 firms who have to comply with its rules. While the cost-savings per firm will be fairly small - averaging £117 a year - the changes are likely to be welcomed.

By Neasa MacErlean

One change is a relaxation of the 12-week rule that allows an individual to cover temporarily for a colleague without being approved by the Financial Conduct Authority, a rule which the regulator says in its consultation paper is seen as being "particularly inefficient, with inconsistent forbearance practices from the FCA adding further uncertainty and complexity". The FCA now proposes that firms have 12 weeks to submit an application under the scheme for the new incumbent rather than, as currently, having to have an application accepted within that timescale. Regulators would then have three months to decide. As with some of the other proposals, further modification is being considered by the Treasury but it would require legislation to be passed first. This second stage of reform is described as "expanding this further and allowing firms more flexibility in appointing interim SMFs [Senior Management Functions] before seeking formal approval".