In the King’s Speech earlier this month, the Government announced its intention to bring to Parliament the Enhancing Financial Services Bill in the coming weeks. In that speech, the Government stated that one of the aims of the Bill is to reduce the overall burden of the Senior Managers and Certification Regime (“SMCR”) by 50%, with a focus on accountability of the most senior figures in financial services.
The aim of this is to ensure that the administrative burden on firms is proportionate without compromising on consumer and market protections, in the hope that this will free up financial services firms to focus on serving customers and investing in growth and to make the UK more attractive for financial services firms to operate in.
This therefore lays down the plan for the legal changes needed to deliver key parts of the Leeds Reforms set out by the Chancellor last year. The reforms include streamlining the Conduct Rules and reducing the number of senior management functions that will require regulatory pre-approval, following the Government’s response to its consultation in April that it would legislate to reform SMCR.
Alongside the April (and upcoming July) changes to SMCR (on which you can read further here), these developments may be helpful in reducing the regulatory burden on Compliance and HR teams in financial services firms. However, such firms should remember that, whilst the burden is easing up in some areas, they should still bear in mind the incoming guidance on non-financial misconduct which comes into force later this year (see further here).
These reforms, combined with the Employment Rights Act 2025 related changes impacting employers across all sectors, mean that there are lots of changes for HR professionals in financial services to keep on top of for 2026.
