The Financial Conduct Authority announced a rollback of post‑2008 “fit and proper” rules, trimming the senior‑managers and certification regime. By easing pre‑approval timelines and raising thresholds, FCA expects the number of staff subject to the tests to fall 15 percent. Firms will gain extra reporting leeway, a change welcomed by industry lawyers. The change also eases the burden on mid‑size banks.

Chancellor Rachel Reeves praised the shift as “better regulation”, arguing that the original framework hampered recruitment and added costly bureaucracy without improving outcomes. The amendment marks the first phase of a broader overhaul that will eventually drop the certification regime for mid‑level roles, a move long demanded by City firms that felt the rules exceeded most international standards. Analysts expect hiring pipelines to improve.

Regulators say the streamlined approach preserves accountability while cutting compliance overhead. FCA deputy chief executive Sarah Pritchard emphasized that consumer protection remains intact, and PRA director David Bailey called the tweak “well‑targeted and efficient”. With fewer firms caught by the regime, banks and insurers can reallocate resources to product development rather than repetitive fit‑and‑proper checks. Overall compliance costs could shrink by millions annually.