FCA SM&CR phase 1 reforms
Key SM&CR changes affecting lenders, brokers and hire firms
The FCA has finalised phase 1 of its SM&CR reforms through PS26/6, introducing a wide range of changes aimed at making the regime more proportionate and operationally efficient while retaining individual accountability.
While some of the changes are technical in nature, they still carry important implications for regulated lenders, hire firms, brokers and intermediary businesses particularly around governance structures, SMF allocation, certification, Conduct Rules and reporting obligations.
The reforms are being phased in across April, July and September 2026 and include:
revised Enhanced SM&CR thresholds
changes to the 12-week rule
updated guidance on SMF7 and SMF18
prescribed responsibilities and governance expectations
revised timing for Statements of Responsibilities and MRMs
Directory reporting and regulatory reference changes
certification streamlining
new COCON guidance linked to non-financial misconduct reforms
We have prepared a detailed factual briefing summarising the key changes and the areas most relevant to firms operating within the consumer credit, asset finance and motor finance sectors. Read the full briefing here.
If you would like to discuss how the reforms may affect your governance arrangements, SM&CR framework or accountability structures, please feel free to get in touch.
