The number of senior financial services roles requiring enhanced regulatory checks will fall significantly under proposals announced by the Prudential Regulation Authority and Financial Conduct Authority. The changes are expected to save firms around £2 billion over a 10-year period while maintaining high standards of individual accountability.
The PRA and FCA have launched parallel consultations to streamline the Senior Managers and Certification regime, which was introduced a decade ago to ensure senior decision-makers were held accountable for their conduct. Under the proposals, unnecessary administrative burdens will be removed, but core protections will remain. The conduct rule breach reporting threshold for most staff below senior manager level will be raised, and Conduct Rule training requirements will be streamlined to allow firms to focus on more serious misconduct.
Certain senior roles will continue to require regulator pre-approval before appointment. These include chief executives, chief financial officers and chairs, who will undergo fit and proper tests. Regulators will also retain the ability to require pre-approval for otherwise notified roles in high-risk cases. Employees in roles no longer requiring pre-approval will continue to face the same level of accountability as before, the regulators said.
Katharine Braddick, Deputy Governor for Prudential Regulation and Chief Executive Officer of the PRA, said the regime remains essential but the proposals would reduce administrative burden where it is not needed, giving firms more time to invest in growth-focused activities. Sarah Pritchard, Deputy Chief Executive of the FCA, said the streamlined regime would support the aim to be a smarter regulator while maintaining improvements in accountability and governance.
Some reforms require legislative change. The consultations are open until 22 January, with policy expected to follow in 2027. The announcements were made as part of Mansion House speeches, during which Braddick unveiled a five-year PRA strategy focusing on financial sector resilience, growth and competitiveness, innovation with data and technology, and transparency.
For UK financial firms and their employees, the changes mean reduced compliance costs and faster hiring processes for most senior roles, while top executives will still face rigorous pre-approval checks and accountability requirements.