The Investing and Saving Alliance (TISA) has welcomed the proposed reforms to the Senior Managers & Certification Regime (SMCR) set out by the Financial Conduct Authority (FCA) and HM Treasury (HMT), which will reduce regulatory burden and improve proportionality.
Drawing on feedback from its 270 member firms, TISA’s responses to the two consultations reflect a strong appetite across the industry for a more streamlined and efficient regime that retains the core principles of accountability and high standards of conduct.
Phil Turnpenny, Policy Executive at TISA, said:
“We warmly welcome the intent behind these reforms. SMCR has helped raise standards across financial services, and now is the right time to refine the regime to better reflect how firms operate today. Our members support the proposals and see real potential to reduce administrative burden while maintaining the regime’s integrity.
We look forward to continuing our engagement with both the FCA and HM Treasury to help shape a regulatory framework that is proportionate, effective, and fit for the future.”
Recommendations
There are several aspects within both consultations that would benefit from greater clarity.
TISA recommends establishing a clear roadmap that connects Phase 1 and Phase 2, enabling firms to plan their governance and systems investments with confidence and visibility.
TISA endorses the FCA’s plans to simplify the Senior Manager Function (SMF) approval process, highlighting that current timelines often exceed six months due to pauses not captured in service metrics. There is also merit in reducing the number of SMF roles and prescribed responsibilities, as simplification would ease operational pressures without undermining governance standards.
TISA fully supports the proposed extension of the 12-week rule for interim appointments, while encouraging further clarity around the application of Conduct Rules during this period to avoid unintended consequences. Greater flexibility in the pre-approval process for senior roles should be welcomed – particularly for individuals with prior regulatory experience – as are efforts to align requirements between the FCA and PRA for dual-regulated firms.
TISA encourages the FCA to explore broader reforms in Phase 2, including rationalising certification categories and simplifying governance documentation. Further clarity on regulatory references and practical guidance on Conduct Rules would also support firms in implementing the regime effectively.
In response to HM Treasury’s consultation, TISA advocates for a more streamlined Certification Regime that retains its value in promoting accountability but eliminates unnecessary duplication. Treasury should revisit the six-year enforcement window for individual conduct breaches, as a more proportionate approach would better balance fairness with regulatory oversight.
Lastly, TISA highlights the occasional challenges its members face with international operations when appointing overseas individuals to UK-regulated roles. Lengthy and complex application processes can disrupt governance and deter global talent – an issue warranting further attention as part of the broader reform agenda.
