CP14/26 – Review of the Senior Managers and Certification Regime (SM&CR) – Phase 2

Phase 1 concentrated on pruning prescriptive expectations and easing proportionality; Phase 2 is expected to tackle the structural plumbing that firms feel daily — how prescribed responsibilities and statements of responsibilities are allocated and maintained, how the certification population is defined and evidenced, and how fitness and propriety, regulatory references and conduct rule breaches are documented and escalated. For compliance teams the practical exposure is documentation, not theory. Statements of responsibilities, management responsibility maps, certification registers and F&P files are all directly in scope, and each is routinely cited in supervisory feedback and enforcement.

Firms that wait for final rules will be compressing remediation into the implementation window. Recommended actions now: (1) assign an accountable owner for the CP14/26 response and gap analysis; (2) baseline your current SMF/SoR allocation and certification population against the proposals and flag any dual-hatting or thin coverage; (3) audit F&P evidence trails and reference processes for consistency across entities; (4) assess training, systems and governance committee changes likely to follow; (5) engage the consultation with evidence on proportionality and cost. Board and SMF accountability remains the through-line — simplification of process does not dilute individual responsibility, and supervisors will continue to test whether senior managers can evidence ownership of the risks in their remit.