The Senior Managers and Certification Regime (SM&CR) and the Approved Persons Regime (APR) are the UK regulators’ frameworks for regulating individuals working in financial services. These frameworks provide for individual approval by the Financial Conduct Authority (FCA) and, where relevant, the Prudential Regulation authority (PRA). The SM&CR replaced the APR in 2016 for banking sector firms regulated by the FCA and the PRA (dual-regulated firms), and in 2018 for all dual-regulated insurance and reinsurance firms. In December 2019, the SM&CR was extended to solo-regulated (eg FCA-only regulated) firms and in December 2020 it was extended to pure benchmark administrators. Together, these firms are referred to as ‘SM&CR firms’. The APR, as the predecessor to the SM&CR, continues to apply to appointed representatives (see Practice Note: APR for appointed representatives—controlled functions). Under Part V of the Financial Services and Markets Act 2000 (FSMA 2000), individuals who will be carrying out certain key roles, known as controlled functions, at authorised firms, must obtain approval from the FCA or, where relevant, the PRA before

STOP PRESS: The FCA, PRA and HM Treasury have announced significant reforms to the Senior Managers and Certification Regime (SM&CR), including final Phase 1 reforms and proposed Phase 2 legislative changes. This Practice Note is in the process of being updated to reflect those developments. In the meantime, see Practice Note: SM&CR—reform of the Senior Managers & Certification Regime. The Financial Services Enforcement Database incorporates detailed information on all substantive FCA and PRA Final Notices and, where available, Decision Notices from 2014 onwards. The Database may be searched and filtered by rule breach, including breaches of SYSC, keywords including Senior Manager Functions such as 'SMF16 Compliance Oversight’ and Conduct Rules including ’Individual Conduct Rule 1’ and ‘Senior Manager Conduct Rule 1’. It can also be searched by sector, date, references to the Upper Tribunal, sanctions such as prohibitions, withdrawals of approval and financial penalties, and aspects of penalty analysis such as seriousness, aggravating and mitigating factors. This Practice Note considers the application of the UK financial regulators’ Senior Managers and Certification

STOP PRESS: The FCA, PRA and HM Treasury have announced significant reforms to the Senior Managers and Certification Regime (SM&CR), including final Phase 1 reforms and proposed Phase 2 legislative changes. This Practice Note is in the process of being updated to reflect those developments. In the meantime, see Practice Note: SM&CR—reform of the Senior Managers & Certification Regime. This Practice Note sets out the sector-specific considerations on the application of the Senior Managers Regime (SMR) and Conduct Rules to firms defined as ‘pure benchmark administrators’. It addresses: the interplay of the Senior Managers and Certification Regime (SM&CR) and the Assimilated Regulation (EU) No 2016/1011 (UK Benchmarks Regulation (UK BMR)); the FCA’s statutory framework and guidance on this topic; SM&CR classification and the waiver system specific to benchmark administrators; and a practical task list for benchmark administrators seeking to comply with the SM&CR. Introduction On 7 December 2020 the SMR and Conduct Rules, key components of the SM&CR, were extended to benchmark administrators that do not undertake any other regulated activities (‘pure benchmark administrators’)

STOP PRESS: The FCA, PRA and HM Treasury have announced significant reforms to the Senior Managers and Certification Regime (SM&CR), including final Phase 1 reforms and proposed Phase 2 legislative changes. This Practice Note is in the process of being updated to reflect those developments. In the meantime, see Practice Note: SM&CR—reform of the Senior Managers & Certification Regime. Introduction The Financial Conduct Authority (FCA) took over regulation of the claims management sector from the Claims Management Regulator (CMR) on 1 April 2019. Consequently, the sector is subject to the FCA’s rules on professionalism, conduct and governance, otherwise known as the Senior Managers and Certification Regime (SM&CR). The SM&CR was extended to FCA solo-regulated firms, including claims management companies (CMCs), on 9 December 2019, or for those CMCs operating on a temporary permission on 9 December 2019, the SM&CR rules apply from the date the CMC was fully FCA-authorised. Under the SM&CR, individuals in CMCs are personally accountable for considering customers’ interests, and for treating them fairly. The application of the SM&CR to CMCs aims

STOP PRESS: The FCA, PRA and HM Treasury have announced significant reforms to the Senior Managers and Certification Regime (SM&CR), including final Phase 1 reforms and proposed Phase 2 legislative changes. This Practice Note is in the process of being updated to reflect those developments. In the meantime, see Practice Note: SM&CR—reform of the Senior Managers & Certification Regime. This Practice Note considers the application of the UK financial regulators’ Senior Managers and Certification Regime (SM&CR) to insurers regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) (dual-regulated), specifically: • the relevant regulatory requirements and guidance • insurers in scope of the SM&CR, and • the Senior Managers Regime (SMR), including FCA and PRA Senior Manager Functions (SMFs) and Prescribed Responsibilities This Practice Note also provides an overview and links to detailed practical guidance on the Certification Regime, Conduct Rules, fitness and propriety requirements, regulatory references and background and development of the SM&CR’s application to the insurance industry. For further practical guidance on the SM&CR including checklists and policy developments, see:

STOP PRESS: The FCA, PRA and HM Treasury have announced significant reforms to the Senior Managers and Certification Regime (SM&CR), including final Phase 1 reforms and proposed Phase 2 legislative changes. This Practice Note is in the process of being updated to reflect those developments. In the meantime, see Practice Note: SM&CR—reform of the Senior Managers & Certification Regime. On 9 December 2019 (commencement), the Senior Managers and Certification Regime (SM&CR) was extended to firms authorised under the Financial Services and Markets Act 2000 (FSMA 2000) and regulated by the FCA and not the PRA (‘solo-regulated firms’, also referred to as ‘FCA-only firms’). After this date, the SM&CR replaced the Approved Persons Regime (APR) for nearly all solo-regulated firms. This Practice Note explains the statutory framework, rules and guidance applicable to solo-regulated firms, and provides a detailed overview of the application of the SM&CR to solo-regulated firms based on their classification as Limited Scope, Core or Enhanced firms. It also sets out the rules applicable to Overseas SM&CR firms and EEA SM&CR firms. This Practice

The Senior Managers and Certification Regime (SM&CR)—what is it? The Senior Managers and Certification Regime (SM&CR) is the framework for regulating individuals in financial services firms authorised under the Financial Services and Markets Act 2000 (FSMA 2000) and is a key supervisory priority for the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). The SM&CR aims to reduce consumer harm and strengthen market integrity by ensuring that the individuals who undertake the key responsibilities in a firm are identified, are aware of and understand their responsibilities and formally accept and uphold them. This ensures such individuals are accountable to their employer and to the regulators. The SM&CR aims to improve conduct at all levels of a firm and foster a culture of individual engagement and accountability. The regime has three key elements: the Senior Managers Regime, the Certification Regime, and the Conduct Rules: • the Senior Managers Regime (SMR) focuses on individuals performing a senior management function (SMF) specified by either the FCA or the PRA, on behalf of a relevant firm whether physically based

This Practice Note tracks the development of policy and guidance related to the SM&CR, together with key dates, past and future. For key dates from 1 January 2025, see: SM&CR—timeline. For further information and LexisPSL resource on the SM&CR, see SM&CR and approved persons regime—overview. For an introduction to the SM&CR, including further details on future developments, see Practice Note: SM&CR—one minute guide. For developments relating to culture, diversity and inclusion (D&I) and non-financial misconduct, see: Culture and social governance in financial services—timeline Action Date The government announced it will consult on replacing the Certification Regime with a ‘more proportionate approach that reduces costs’. Both the FCA and the PRA said they will work with HM Treasury to achieve this. See News Analysis: UK unveils plan to roll back post-financial crisis safeguards; PRA responds to UK Government’s call for regulators to support economic growth, LNB News 20/01/2025 31; FCA responds to UK Government’s call for regulators to support economic growth, LNB News 17/01/2025 61 14 November 2024 The FCA published

Overview The Financial Conduct Authority (FCA), Prudential Regulation Authority (PRA) and HM Treasury (HMT) are reforming the Senior Managers and Certification Regime (SM&CR) as part of the Government’s Leeds Reforms programme intended to enhance the competitiveness of the UK financial services sector. In April 2026, the FCA published Policy Statement PS26/6: SM&CR Review and the PRA published PS12/26: Review of the SM&CR − Phase 1, setting out final Phase 1 reforms. At the same time, HMT published Reforming the SM&CR, Consultation Response, setting out proposed Phase 2 legislative reforms. ‘Phase 1’ refers to operational and rulebook reforms implemented without legislative amendment. ‘Phase 2’ refers to proposed legislative reforms and consequential FCA/PRA rule changes requiring amendment to Financial Services and Markets Act 2000 (FSMA 2000). This Practice Note details the final Phase 1 reforms, including the dates changes take effect and the relevant new or amended FCA or PRA rules and guidance. It also sets out information on Phase 2 reforms; Phase 2 legislative reform is underway. Reforms are set out below, including

This Practice Note tracks the development of policy and guidance related to the SM&CR, together with key dates, from 1 January 2025 onwards. For practical guidance on the SM&CR, see SM&CR and approved persons regime—overview. For an introduction and overview of future policy development of the SM&CR, see Practice Note: SM&CR—one minute guide. For developments relating to culture and non-financial misconduct, see: Culture and social governance in financial services—timeline. Date Source Documents Description 22 October 2026 FCA CP14/26—Review of the Senior Managers and Certification Regime (SM&CR) – Phase 2Consultation Paper CP26/37 Senior Managers & Certification Regime Review: Phase 2Regulators unveil plans to simplify Senior Manager and Certification Regime The FCA and the PRA have launched parallel consultations on proposals to streamline the SM&CR, reducing the number of financial services roles required to face enhanced checks. Responses to PRA CP14/26 and FCA CP26/37 are sought by 22 January 2027, with a policy statement expected to follow in the first half of 2027.See: FCA and PRA consult on further streamlining of the SM&CR. 3 June 2026 HMT Correspondence

The Social Mobility Commission (SMC) has published a report examining how recruitment, pay and career progression affect social mobility. The report looks at the evidence of how employers and workplace practices can influence socio-economic inequalities in the workplace and social mobility in the UK and reviews the strengths and limitations of different measures of socio-economic background that employers can use to monitor their workforce.

A multilateral trading facility that is registered as an SME growth market (market for small and medium-sized enterprises) in accordance with Part 5.10 of the Market Conduct sourcebook. AIM is registered as an SME Growth Market.