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FCA training for small firms

SM&CR for small UK firms: what it requires and how to train for it

By Robert Glynn, Compliance Solutions Manager, Skillcast. Updated 5 November 2026.

The Senior Managers and Certification Regime (SM&CR) is the Financial Conduct Authority (FCA) framework that makes named people accountable for how a regulated firm is run and sets standards of conduct for the people who work there. It applies to small firms as well as large ones: the FCA places every solo-regulated firm in one of three categories, and even a sole trader is in scope as a Limited Scope firm (FCA). A firm without a compliance team has to be able to show three things: who is responsible for what, that people in certain roles are fit and proper, and that staff know the Conduct Rules that apply to them.

What SM&CR is: three parts

SM&CR has three parts, and each one asks something different of a small firm.

The Senior Managers Regime

People who hold a Senior Management Function (SMF), such as the person with overall responsibility for compliance oversight, need FCA approval before they start. Pre-approval by the FCA applies to all solo-regulated firms (SYSC 23 Annex 1). Each Senior Manager also needs a statement of responsibilities setting out what they are accountable for.

The Certification Regime

Some roles are not Senior Management Functions but can still have a significant impact on customers or the firm. The FCA does not approve these people. Your firm checks and certifies that they are fit and proper on appointment and at least once a year. The FCA notes that very small firms may not have any certification functions (FCA).

The Conduct Rules

Six Individual Conduct Rules apply to all conduct rules staff, and four further rules apply to Senior Managers (COCON 2). See the FCA Conduct Rules explained for what each one means in practice.

Which SM&CR category is your firm in?

Most small firms are Core firms. Your firm is responsible for working out its own category from the rules (FCA).

CategoryWho it coversWhat it means
Limited ScopeSole traders, and other firm types that meet the conditions in Part 6 of SYSC 23 Annex 1Exempt from some baseline requirements, and typically fewer Senior Management Functions
CoreEvery solo-regulated firm that is not Limited Scope or EnhancedThe baseline SM&CR requirements
EnhancedFirms over set size thresholds, such as £65 billion or more of assets under management, £45 million or more of intermediary regulated business revenue a year, or £130 million or more of regulated consumer credit lending revenue a year, each as a three-year rolling average. Certain significant firms and large client money (CASS) firms are also Enhanced.Additional requirements on top of Core

The Enhanced thresholds were raised under the FCA's 2026 reforms. The figures above are the ones the FCA published on 24 April 2026 (FCA categorisation page).

What is a Core SM&CR firm? A Core firm is an FCA solo-regulated firm that does not meet the Limited Scope conditions or any Enhanced threshold. It follows the baseline requirements of the regime. This is the category most small advice, broking, investment and payments firms sit in.

What a small firm has to be able to evidence

Training is part of the evidence, not the whole of it. Most SM&CR obligations are things your firm does and records itself.

ObligationWhat your firm doesWhere training fits
Statements of responsibilities and prescribed responsibilitiesWrites, approves and keeps them currentSM&CR in Practice may help Senior Managers understand what good looks like. The documents are yours.
Fitness and propriety of certified staffAssesses on appointment and at least once a year, and issues certificatesFit and Proper Assessments may support the people who run these checks.
Regulatory referencesRequests and provides them, within four weeks at most when asked (FCA)Not a training obligation.
Telling staff about the Conduct RulesNotifies everyone the rules apply to and takes reasonable steps to make sure they understand themSuitable training is part of those steps under COCON 2.3. Courses such as Meeting the Conduct Rules in FCA Solo Regulated Firms may support it.
Conduct Rules breach reportingReports breaches that led to disciplinary action: an annual return for most staff, and within 7 business days for a Senior ManagerNot a training obligation.

The training and breach reporting points come from COCON 2.3 and the FCA Conduct Rules page. The certification and reference points come from the FCA Certification Regime page.

Not sure which obligations your permissions trigger? The FCA permissions guide maps them firm by firm.

The Conduct Rules in brief

There are ten Conduct Rules in total: six for all conduct rules staff and four more for Senior Managers.

The six Individual Conduct Rules cover integrity, skill and care, openness with regulators, treating customers fairly, market conduct and, since July 2023, delivering good outcomes for retail customers under the Consumer Duty. The four Senior Manager Conduct Rules cover effective control, compliance, delegation and disclosure to the regulators (COCON 2). From 1 September 2026, serious work-related misconduct such as bullying and harassment can also be a Conduct Rules breach in firms outside banking.

Read the FCA Conduct Rules explained for small firms for each rule, with an example of what a breach can look like.

What changed in 2026, and what is proposed

Phase 1 of the FCA's SM&CR reforms is in force. Phase 2 is a consultation, and the current rules still apply.

Phase 1, in force

The FCA published PS26/6 on 22 April 2026. Most changes took effect on 24 April 2026, reporting and process changes on 10 July 2026, and changes to the Directory of certified and assessed persons on 30 July 2026 (PS26/6). Changes aligned with the non-financial misconduct rules applied from 1 September 2026.

Non-financial misconduct, in force from 1 September 2026

A new rule in the Code of Conduct sourcebook (COCON), with guidance, explains how non-financial misconduct can breach the Conduct Rules and how it forms part of the fit and proper test (PS25/23). See non-financial misconduct for small UK firms for what this means in practice.

Phase 2, proposed

On 22 October 2026 the FCA published CP26/37. It proposes removing the Certification Regime, retiring the Directory, simplifying Conduct Rule training and raising breach reporting thresholds. The consultation closes on 22 January 2027, and the FCA expects to publish final rules in the first half of 2027 (CP26/37). Until any change is made, the current requirements apply.

SM&CR training by role

Match the course to the role. Every course below is part of your CoreCompliance subscription.

All conduct rules staff

Meeting the Conduct Rules in FCA Solo Regulated Firms
In-depth, 25 minutes

Introduction to the Senior Managers and Certification Regime (SMCR)
Express, 10 minutes

Non-Financial Misconduct
Express, 15 minutes

Everyone who needs the full picture of the regime

Overview of SM&CR for FCA Solo Firms
In-depth, 30 minutes

Senior Managers

Conduct Rules for Senior Managers at FCA Solo Firms
In-depth, 60 minutes

SM&CR in Practice
In-depth, 75 minutes

Senior Management Arrangements Systems and Controls
In-depth, 25 minutes

Non-executive directors

Conduct Rules for Non-Executive Directors (NEDs)
In-depth, 30 minutes

People who run fitness and propriety checks

Fit and Proper Assessments
Express, 20 minutes

Short courses on each of the six Individual Conduct Rules, about 5 minutes each, are also in the library for refreshers between full courses.

A course may support your staff training. It does not establish compliance by itself, and the records your firm keeps still matter.

Try the SM&CR courses yourself

Start a 30-day free trial with no card. You can start up to five courses yourself, including the SM&CR ones, and see the full collection before you decide.

Plans start from £349 a year for a single user, excluding VAT. Pricing for larger teams is on the pricing page.

Start your free trial

Questions about SM&CR for small firms

Does SM&CR apply to a firm with five staff?

Yes, if it is an FCA solo-regulated firm. SM&CR has no size threshold for being in scope: size affects which category a firm is in, not whether the regime applies. Even a sole trader is in scope as a Limited Scope firm.

What is a Core SM&CR firm?

A Core firm is an FCA solo-regulated firm that does not meet the Limited Scope conditions or any of the Enhanced thresholds. It follows the baseline SM&CR requirements, and it is the category most small firms are in.

Who needs Conduct Rules training?

Your firm must tell everyone subject to the Conduct Rules which rules apply to them, and take reasonable steps to make sure they understand them, including suitable training. The six Individual Conduct Rules apply to all conduct rules staff, and Senior Managers also have four further rules.

How often does SM&CR training have to happen?

The FCA rules do not set a fixed frequency for Conduct Rules training. The FCA describes good practice as training that is reinforced regularly and built into onboarding. Separately, certified staff must be assessed as fit and proper at least once a year, which is an assessment rather than a training requirement.

Is the Certification Regime being removed?

It is proposed, not decided. The FCA consultation CP26/37, published on 22 October 2026, proposes removing it. The consultation closes on 22 January 2027 and final rules are expected in the first half of 2027. Until then the Certification Regime applies as it does now.

Do the non-financial misconduct changes apply to small firms?

Yes. The FCA's non-financial misconduct changes apply to all firms with a Part 4A permission and their staff who are subject to the Conduct Rules or the fit and proper test, and they came into force on 1 September 2026.

Sources

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