Senior management functions

Senior management functions (SMFs) are a type of controlled function under FSMA. They are prescribed in the Handbook and apply to UK-authorised firms and EEA Branches. Which ones apply to you will depend on what SM&CR firm type you are.

We call the people who hold these functions Senior Managers. They are the most senior people in a firm with the greatest potential to cause harm or impact upon market integrity. We make particular functions SMFs so that we know who a firm’s most senior decision makers are, and to make sure firms clearly allocate responsibilities to those key individuals. Anyone who performs an SMF needs to be approved by us before they can start their role. 

Examples of SMFs include:

  • being an executive director of a regulated firm
  • being responsible for compliance with our rules
  • being responsible for overseeing the firm's compliance against money laundering

An individual can hold more than one SMF, e.g a director can perform the director function and the compliance oversight function, but you must show in your application that the individual can manage multiple roles.

Different SMFs apply to different businesses, depending on what activities they provide. No individual approved by a firm will need to perform all the functions.

The number of SMFs your staff will need to be approved for will depend on the activities you intend to carry out, the legal entity of your business and the permissions you require. 

It is unlikely you will be able to outsource these roles and still meet the standards we expect, although we assess this individually. You can, however, outsource resources for guidance and support for approved persons.