In April 2026, the Prudential Regulation Authority (PRA), alongside the FCA, published its Phase 1 reforms to the Senior Managers and Certification Regime (SM&CR). The changes are designed to reduce unnecessary administrative burden while preserving strong individual accountability, following industry feedback and a decade of experience with the regime.
This blog focuses primarily on the PRA’s Phase 1 Reforms guidance and therefore applies only to PRA-regulated firms, including dual-regulated firms such as banks, building societies and insurers. The Phase 1 Reforms were developed jointly between the PRA and FCA, meaning the FCA has also published a parallel package of reforms and guidance under PS26/6 which applies across both solo-regulated and dual-regulated firms. Together, the PRA and FCA publications reflect a coordinated effort to deliver a more proportionate and less burdensome regulatory framework and should be read alongside one another where firms fall within scope of both regulators.
Further policy statements, consultations and supporting guidance are also expected from both the PRA and FCA later in the summer as the wider programme continues to develop and be implemented.
Phase 1 reforms focus on practical, operational improvements that can be delivered without legislative change. Most measures came into force from 24 April 2026, with some reporting and systems changes following later in the year.
Key changes introduced in Phase 1
The policy statement confirms a series of targeted updates intended to simplify how firms operate under SM&CR:
- Clearer and more proportionate Statements of Responsibilities (SoRs) and Management Responsibilities Maps, reducing duplication and unnecessary detail
- Streamlining of Senior Management Functions (SMFs), including adjustments to group and “other overall responsibility” roles
- Reduced friction in the 12‑week rule for interim senior managers, providing firms with more flexibility during temporary cover arrangements
- Improvements to Certification Regime processes, including criminal record checks, regulatory references, and the Directory of Persons, cutting down repeat manual activity
- Refinements to Conduct Rules and prescribed responsibilities, helping firms apply them in a more consistent and risk focused way
Overall, regulators are signalling that SM&CR is staying but it must work efficiently, especially for firms balancing growth, governance and cost control.
What this means for regulated firms
For regulated firms, the Phase 1 review is both an opportunity and a responsibility:
- Operational relief: Firms can simplify internal processes, reduce duplication, and spend less time maintaining static documents that add limited value.
- Higher expectations on clarity: While requirements are lighter in places, regulators still expect responsibilities, approvals and certifications to be accurate, current and auditable.
- Increased scrutiny of execution: As the rules become simpler, poor implementation becomes harder to justify during supervisory review.
- Preparation for Phase 2: Phase 1 sets the direction for more structural reform later in 2026, subject to legislative change by HM Treasury.
In short, firms that rely on manual, document heavy SM&CR management may struggle to keep pace with regulator expectations as the framework becomes more streamlined but more explicit.
How Worksmart can help
Worksmart directly supports the goals of the Phase 1 reforms by helping firms implement SM&CR in a controlled, efficient and regulator ready way.
SM&CR accountability and oversight
- Centralised tracking of senior manager responsibilities, certifications and approvals
- Clear ownership and visibility across Senior Managers, HR, Compliance and Risk
Certification and Conduct Rules management
- Structured workflows for annual certification, fitness and propriety assessments
- Evidenced completion of Conduct Rules training and attestations
Audit ready documentation
- Consistent, up-to-date records that support SoRs, responsibility mapping and regulatory references
- Fast access to data for PRA or FCA supervisory queries
Reduced operational burden
- Less reliance on spreadsheets and disconnected systems
- Fewer manual handoffs between teams, lowering SM&CR risk exposure
By digitising and coordinating SM&CR processes, Worksmart helps firms benefit from the simplifications introduced in Phase 1, while maintaining confidence that accountability obligations are being met.
The Bank of England’s Phase 1 SM&CR review reinforces a clear message: accountability remains non-negotiable, but unnecessary complexity is not. Firms that take advantage of this shift, supported by robust governance tools, will be best placed to meet regulatory expectations today and prepare for the next phase of reform.