After several years of constructive feedback from industry, the FCA has taken a measured step to modernise the Senior Managers and Certification Regime (SM&CR). Policy Statement PS26/6, published on 22 April 2026, represents the most substantive recalibration of SM&CR since its introduction in 2016. Framed as an efficiency‑led refinement rather than a fundamental shift, the changes nevertheless create meaningful commercial and operational opportunities for firms that respond early and adopt a considered, strategic response.
A Clear Shift in Regulatory Approach
PS26/6 reflects an evolving regulatory mindset. The FCA, working alongside the PRA and HM Treasury, is seeking to strike a more sustainable balance between robust individual accountability and proportional regulatory operation. The direction of travel is clear: accountability remains central, but the regulatory framework is being streamlined to reduce unnecessary friction and allow firms to focus resources where they add most value.
Importantly, this is not a dilution of standards. Senior managers remain personally accountable, conduct rules continue to apply, and the duty of responsibility is unchanged. What has shifted is the FCA’s willingness to give firms greater flexibility in how they operationalise SM&CR, with a clear expectation that this flexibility will be exercised responsibly and supported by strong governance.
What Has Changed and the Commercial Impact
A more workable approach to the 12‑week rule.
Previously, firms had 12 weeks to submit and receive approval for a Senior Management Function application. This window routinely caused problems during acquisitions, leadership transitions, and interim arrangements. Under PS26/6, the clock now runs to submission only, and the individual can continue in the role until the FCA determines the application. For anyone who has navigated a time-sensitive hire or a post-transaction restructuring under the old rules, this is a genuine operational improvement. The trade-off that the Senior Manager Conduct Rules now apply to non-SMFs acting in an SMF capacity is reasonable and largely reflects what good governance should already require.
Reduced duplication in criminal record checks.
The validity period extends from three to six months, and checks are no longer required for internal or intragroup moves. For group structures, private equity platforms, and firms that regularly rotate senior talent across entities, this removes real friction and real cost without any credible argument that it increases risk.
Greater flexibility around Statements of Responsibilities and Management Responsibilities Maps.
Firms now have up to six months to notify changes, and only the most recent version needs to be submitted where multiple updates occurred in the period. This sounds procedural, but for firms managing frequent senior-level changes, particularly in fast-growing or PE-backed businesses, it meaningfully reduces the administrative drag of keeping regulatory records current in real time.
A streamlined Certification Regime.
Allowing digital certificates, aligning certification to annual appraisal cycles and enabling a more proportionate approach where nothing material has changed significantly reduces ongoing workload. From July 2026, the removal of duplicate certification for overlapping functions is expected to materially reduce the overall certification population which inevitability is a tangible efficiency gain for lean compliance teams.
More time to update the Financial Services Register.
Firms now have 20 working days (up from seven) to update the Financial Services Register with changes to certified and assessed persons. Again, procedural, but firms that have been caught out by the seven-day window during periods of senior-level flux will appreciate the additional time.
What Firms Should Be Doing Now
Most changes took effect on 24 April 2026, which means the window for early movers to capture the benefit is already open. Here’s where to focus:
- Map your certification population against the new overlapping functions guidance. If your firm certifies individuals across multiple functions that will now be consolidated, you have an opportunity to simplify your HR and compliance processes. Do not wait for the July implementation date to start that mapping exercise.
- Review your SMF approval workflow. The reformed 12-week rule changes the risk calculus around interim appointments. Firms should update their internal protocols to reflect that individuals can act in role pending FCA determination and ensure that Conduct Rule obligations are properly communicated to anyone stepping into an SMF capacity.
- Rationalise your SoR and MRM update cadence. The six-month notification window gives firms more discretion, but it does not reduce the obligation to maintain accurate internal records. Use the additional time to build a more deliberate, governance-led update process rather than a reactive one.
- Prepare for Phase 2. PS26/6 is explicitly Phase 1. HM Treasury has signalled its intention to remove the Certification Regime from primary legislation, reduce the number of SMFs requiring regulatory pre-approval, and enable more structural reform. The FCA expects to consult on Phase 2 rule changes before the end of 2026. Firms that use Phase 1 to rationalise and strengthen their SM&CR frameworks now will be better positioned to absorb, and benefit from, what comes next.
The Bigger Picture
There is a temptation to read PS26/6 as the FCA giving firms permission to take their foot off the gas on individual accountability. That would be a mistake. What the FCA is actually doing is redistributing compliance effort from process and paperwork toward judgment and governance. Increased flexibility comes with an implicit expectation that firms will exercise that flexibility well. Supervisory focus is likely to shift from whether the forms were filed on time to whether the accountability framework is genuinely working.
That is a harder standard to meet than a checklist, and firms should approach the reforms with that in mind. PS26/6 is not a relaxation. It is an invitation to do SM&CR better, leaner, more purposeful, and more genuinely connected to how firms are actually run.
The firms that respond well will come out with simpler compliance processes, lower administrative costs, and accountability frameworks that actually reflect their governance. The firms that treat it as a reason to do less will find the regulator’s patience has not grown alongside its flexibility.
How Square 4 Can Help
PS26/6 gives firms a timely opportunity to simplify SM&CR without weakening accountability. Square 4 supports boards and senior leaders to optimise SM&CR, streamline certification and governance, and prepare confidently for the next phase of reform. Boards should act now to assess their SM&CR frameworks and capture the full benefit of the Phase 1 changes.
Contact us at hello@square4.com to discuss how to convert PS26/6 into tangible governance and operational benefits.
Darren Fisher
Senior Advisory Director
Square 4 Partners
