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SMCR Reform 2026: Board and NED Accountability Pack
CP25/21 | CP18/25 | HMT Phase 2 | Certification Regime | Duty of Responsibility
The most significant reform of SMCR since its 2016 introduction is underway. This pack explains what is changing, what is not — and critically, why the duty of responsibility and personal regulatory liability for NEDs remain fully intact regardless of the reforms.
What This Pack Contains
- Summary of all SMCR reform proposals from CP25/21, CP18/25, and HMT Phase 2
- What changes: Certification Regime reform, SoR simplification, SMF consolidation
- What does NOT change: duty of responsibility, personal regulatory liability, conduct rules
- Current NED SMF roles and responsibilities reference guide
- Transitional planning checklist — what boards should be doing now
- Consultation response guidance for firms that wish to respond
- 10 board questions on SMCR reform
What Is NOT Changing
The most important message for NEDs and Senior Managers is what the reforms do NOT change. The core personal accountability framework remains fully intact:
- The duty of responsibility: Senior Managers remain personally liable for regulatory breaches in their area of responsibility where they fail to take reasonable steps to prevent them
- Personal enforcement action: The FCA and PRA retain full powers to bring enforcement action against individual SMF holders
- Conduct Rules: Individual Conduct Rules obligations remain for all Senior Managers and Certified Persons
- Fit and Proper requirements: The substantive F&P standard remains — only the formal annual certification cycle is being removed
- Regulatory references: The requirement to disclose material regulatory breaches in references for departing staff remains unchanged
10 Board Questions on SMCR Reform
- Does the board understand that the duty of responsibility — the core personal liability mechanism — is not being reformed?
- Have all NED SMF holders reviewed their current Statements of Responsibilities in light of the proposed simplification?
- What is the firm’s plan for maintaining F&P oversight of Certified Persons if the annual certification cycle is removed?
- Has the board been briefed on the CP25/21 and CP18/25 proposals and their implications for firm governance?
- Does the firm intend to respond to the FCA/PRA consultations, and has the board approved the response?
- Is management treating the reform proposals as an opportunity to genuinely improve the SMCR framework, or simply to reduce compliance burden?
- What is the timeline for final rules, and has the firm mapped its transitional planning accordingly?
- Are all NED SMF holders aware that their personal regulatory liability is unchanged by the reform?
- How will the firm maintain effective governance and accountability if administrative SMCR requirements are reduced?
- Has the firm reviewed the FCA’s and PRA’s stated objectives for the reform to understand what behaviours regulators are seeking to encourage?
This pack is included in the INFORMD Executive Team plan (£299/month) and available as a standalone download. Contact us for enterprise or multi-firm access.