Following the Edinburgh Reforms announcement in December 2022, the review of the Senior Managers and Certification regime has been kicked off with HM Treasury publishing a call for evidence and the U.K. Financial Conduct Authority and Prudential Regulation Authority publishing a joint discussion paper. Both reviews should be considered alongside each other and responses to both may be submitted until June 1, 2023. The U.K.'s Senior Managers Regime has been criticized in imposing a close-to-strict level of liability on individuals, including for any problems which arise in their designated area of responsibility, potentially making the U.K. a less attractive place for senior financial services professionals to operate.

The SM&CR initially only applied to banks and large investment firms. However, it has since been extended to all U.K. authorized firms and U.K. benchmark administrators. The Financial Services and Markets Bill provides for the extension to U.K. CCPs and CSDs and enables HM Treasury to further extend the regime to credit rating agencies and exchanges. The FCA has called for the SM&CR to be extended to CRAs, exchanges and payment services firms.

HM Treasury's review considers the legislative framework and seeks input from respondents on the functioning of the regime, including its effectiveness in delivering against the main objectives and whether those are still right for the U.K. The potential impact of the SM&CR on the U.K.'s international competitiveness is another issue on which HM Treasury would like feedback, including whether certain aspects of the regime discourage firms from locating to the U.K.

The FCA and PRA review centers on the regulatory aspects of the SM&CR, including the regime's effectiveness, scope, proportionality and approach of the regulators to enforcement.

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