UK Regulators Propose Easing Post-Crisis Accountability Rules for 140,000 Finance Staff

The UK's primary financial regulators, the Bank of England's Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), announced proposals on October 22, 2026, to significantly relax the Senior Managers and Certification Regime (SMCR), a post-2008 financial crisis measure designed to enhance individual accountability[1][2]. These changes are projected to save financial businesses approximately £2 billion over the next decade[1].

These proposed reforms aim to reduce regulatory burdens on financial firms and boost the competitiveness of the UK's financial sector[1]. The regulators state that the changes will allow firms to focus resources on more serious misconduct, while maintaining high standards of individual accountability and conduct[1][2].

What the records show

The PRA and FCA announced parallel consultations on proposals to "significantly streamline the Senior Managers and Certification regime (SM&CR)"[1]. These plans involve a substantial reduction in the number of financial services roles subject to enhanced regulatory checks[1]. More than 140,000 finance executives will no longer be required to undergo annual "fit and proper" checks by their employers[2][4]. The requirement for firms to record these results in a central directory and provide references detailing any breaches will also be removed for these individuals[2].

The number of employees covered by the Senior Managers Regime, which applies similar rules to higher-ranking staff, is set to be cut by up to 2,000[2]. This overall reduction will bring the total number of employees requiring annual fit and proper checks down by two-thirds, to about 74,000[2]. The regulators also plan to cut by over 40 percent the number of senior manager appointments they must pre-approve, allowing companies to notify them of hires instead[2]. The Bank of England stated that removing the requirement to report minor conduct breaches would free companies to concentrate on "more serious misconduct"[2].

The timeline

The Senior Managers and Certification Regime was initially established in response to public anger over the 2008 banking crisis, aiming to address the lack of individual accountability for actions that contributed to the crash[2][4]. The FCA and PRA published the final rules for the banking sector, covering the Senior Managers Regime, Certification Regime, and new Conduct Rules, on July 7, 2015[3][15]. The SMCR became effective for the banking industry in March 2016[17][18] and was later extended to insurers in December 2018 and most other FCA-regulated financial firms by December 2019[18].

Broader efforts to ease banking rules in the UK began with Treasury chief Jeremy Hunt's announcement on December 9, 2022, which included lifting the cap on banker bonuses[6]. Spotlight on Corruption published a report titled "Power Without Responsibility" on February 7, 2024, examining senior executive accountability[5]. Phase 1 SMCR reforms were introduced by the FCA and PRA on April 22, 2026[8][22], with some changes, such as increased thresholds for enhanced SMCR firms, taking effect from July 10, 2026[11][12][13]. The current extensive proposals were announced on October 22, 2026[1].

What changed and for whom

Financial firms could see reduced regulatory burdens and cost savings attributed to these proposals, estimated at £2 billion over a decade[1]. They will benefit from fewer annual checks for a large portion of their staff and fewer pre-approvals for senior manager appointments[2]. For finance executives, approximately 140,000 individuals will no longer be subject to annual "fit and proper" checks[2][4]. Regulators state the changes will allow them to shift focus to "more serious misconduct"[2]. The government has presented a new objective for regulators, which includes ensuring UK firms are competitive[4].

What the subject has said publicly

The regulators assert that these reforms will maintain high standards of individual accountability and conduct[1][2]. They state the changes will allow firms to concentrate resources on more serious misconduct and foster growth within the financial sector[1][2]. When the original rules were established, Martin Wheatley, then Financial Conduct Authority chief executive, commented on July 7, 2015, that the rules would "embed personal accountability into the culture of The City"[3][15].

What we could not confirm

PrimaryBrief could not confirm specific details regarding how regulators will practically distinguish between "more serious misconduct" and "lower-level misconduct" in future enforcement actions. We also could not confirm the precise impact these changes will have on the actual number of individuals held accountable for financial misconduct in the long term.