On 30 March 2023, HM Treasury published a Call for Evidence (CfE) on the Senior Managers and Certification Regime (SMCR). The CfE follows the Government’s announcement in December 2022, as part of the Edinburgh Reforms, that HM Treasury, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) would commence separate reviews of the SMCR.

The CfE explains that, overall, the Government understands there is broad support for the principles and objectives underpinning the SMCR. However, firms operating within the regime have raised some concerns over certain aspects of the regime, on topics including the compliance requirements for authorising the appointment of new Senior Managers, the differing levels of scrutiny applied to different firms, and the interaction of the SMCR with other regulatory regimes.

Therefore, the CfE has been published to ensure that HM Treasury, the FCA and the PRA can build a joint evidence base upon which to consider future reforms to the regime.

In considering the responses to the CfE, HM Treasury will continue to work closely with both the FCA and the PRA. Each organisation will focus on their particular area of responsibility, with HM Treasury considering legislative aspects, while the FCA and PRA consider operational aspects and rules. However, HM Treasury notes that they all agree on the importance of a holistic understanding of the regime and objective data about how it operates in practice.

The Government is keen to use the CfE alongside the joint Discussion Paper published by the FCA and PRA, to understand stakeholders’ views on the overall functioning of the regime. The Government also seeks to explore whether there are any opportunities to better deliver on the regime’s core objectives, while minimising the impact on firms and the regulators.

The deadline for comments to the CfE is 1 June 2023.