SMCR Review: What does the future hold for the Senior Managers Regime?

As promised in its Edinburgh Reforms, the UK government has opened a review of the Senior Managers and Certification Regime. The Treasury’s call for evidence and regulators’ discussion paper give little away about what might come from the review.

Few soothsayers foresee a wholesale reshaping of the SMCR. After all, the government says that there is “broad support” for the regime in principle. The FCA and PRA say that feedback to them has stressed the regime’s positive consequences. They also point out that the SMCR is now an integral part of their approach to regulating financial services firms.

However, it’s possible to forecast areas of future incremental change.

The government wants to hear about firms’ “practical experience” of the regime. Could the Senior Manager approval process be made more efficient? Could reform of the SMCR help make the UK market more attractive? How do the UK rules compare to similar regimes in other financial centres?

Reading the runes, the review could result in some processes being streamlined and administrative burdens reduced. Adjusting the frequency with which management responsibility maps and statements of responsibilities must be re-submitted to the regulators may be one example. There could also be changes in scope, reining in the SMCR to focus on managing risks and make sure that it applies proportionately.

Of course, the best way to predict the future is to create it. The review is an opportunity for you to have your say on the effectiveness of the regime. To get you started, read our summary of the SMCR review papers.