View from the Chair: SMCR – Adjusting the tiller

The 1st June deadline for submitting responses to the FCA / PRA DP23 and the Treasury’s Call for Evidence in relation to the Senior Manager & Certification Regime has now passed. The questions posed by the FCA / PRA and Treasury are the starting gun for a process of reform as outlined in the Edinburgh Reforms last year. What is needed here is an adjustment of the tiller, not wholesale change. The financial services industry is supportive of the aims behind the SMCR and, over the course of the last eight or so years, it has done much to improve corporate governance.

The SMCR is a home-grown initiative which still has no direct equivalent across the EU and, whilst a number of other countries have now adopted similar regimes, it’s essentially domestic in nature. There’s a prize to be gained here in terms of making the regime a better fit for international firms with a UK presence, which would play well with the regulators’ objectives around international competitiveness.

Over the coming weeks and months, the regulators and the treasury will digest the feedback received meaning we can expect further consultation on some proposed changes. Much of the criticism around the regime is about process rather than intention. In particular, the operation of the regime is cumbersome for many firms and approval timelines unacceptable in many cases. The scope of the certification element of the regime is arguably too wide and too bureaucratic. The fact that only one enforcement action has been taken since the introduction of the regime in 2016 indicates regulators are failing to effectively use the tools that they have to hold senior individuals to account.

The regime continues to be a success despite the actions, or lack of them, from the regulators and not as result of them. Success would be a regime that retained the key elements of the existing system while operating in a far more efficient fashion, and demonstrates credible deterrence through taking swift and appropriate enforcement action.


‘View from the Chair’ is Bovill’s regular column from our Executive Chair Ben Blackett-Ord who founded the firm in 1999 and led it as CEO until 2022. Ben continues to support Bovill’s executive team and clients, as well as being a prominent figure in the industry.