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Certification changes reshape staff controls
The UK's Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) want to remove the Certification Regime from the Senior Managers and Certification Regime (SM&CR). The package is projected to save firms £2 billion over the next decade. Consultation is open until January 2027, with implementation dependent on final policy and legislative changes.
If adopted, about 139,000 employees below senior-management level would no longer need annual regulatory certification or appear in the FCA Directory. Firms would still have to judge staff competence, suitability and conduct. Regulatory approval would remain necessary for senior managers in key positions.
Appointment rules shift to notification
For some other roles, firms would notify regulators instead of seeking approval in advance. The proposed change covers Chief Actuaries and chairs of Risk and Audit Committees. Firms would remain responsible for checking candidates' fitness and propriety, while regulators could require prior approval for a notified role they regard as high-risk. Chairs, CEOs and CFOs would still need pre-approval.
The FCA also proposes a higher bar for reporting conduct-rule breaches by most staff below senior-manager level, alongside simpler training requirements. The consultation sits alongside other UK and European regulatory changes, as Finance Magnates reported. In digital assets, the FCA has reduced its proposed stablecoin issuance capital requirement from 2% to 1% and dropped some proposed public-disclosure duties after industry feedback, while keeping the core cryptoasset framework.
ESMA has recommended a long-term transaction-reporting model based on a single report, but it would need legislative changes and a phased rollout. The EU's MiCA regime continues to require authorisation and prudential measures from crypto firms.
- Certification and FCA Directory listing would end for the affected staff group.
- Some appointments would move to notification, with a high-risk approval safeguard.
- Conduct reporting thresholds and training requirements would change.
Where this lands in the stack
Compliance and HR teams can map which records support annual certification, Directory entries, competence reviews and training. If the certification step goes, what evidence will the firm retain to demonstrate its continuing assessments of staff? Which workflow will send appointment notifications, and how will it flag roles that may require advance approval?
For firms operating across jurisdictions, the UK proposals do not remove the need to track separate reporting and authorisation duties. ESMA's suggested reporting approach still depends on legislative change and staged implementation, while MiCA's requirements remain in place. Operators can use the consultation period to identify which controls could change and which records and processes must continue.
