Learn about senior management functions (SMFs) and how we assess them.
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SMFs are a type of controlled function carried out by approved persons. Anyone who performs an SMF needs to be approved by us before they can start their role.
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 individuals.
SMFs apply to UK-authorised firms and EEA branches. Which ones apply to you will depend on what type of SM&CR firm you are.
Examples of SMFs include being:
- an executive director of a regulated firm
- responsible for compliance with our rules
- responsible for overseeing the firm's compliance against money laundering
Approving individuals for SMFs
An individual can hold more than one SMF – for example, a director can perform the director function and the compliance oversight function – but in your firm's application you must show that the individual can manage multiple roles.
Different SMFs apply to different businesses, depending on what activities they do. We wouldn't expect a single Senior Manager to hold all of your firm's required SMFs.
The number of SMFs your staff will need to be approved for will depend on the:
- activities you intend to carry out
- legal entity of your business
- permissions you require
You probably won't be able to outsource these roles and still meet the standards we expect, but we'll assess this on a case-by-case basis. You can, however, outsource resources for guidance and support for approved persons.
See our guidance on how to apply to us to approve an individual or firm.
How we assess applicants for SMFs
Only individuals with the appropriate skills and behaviours should be appointed to hold SMFs.
We also expect firms to have balanced and effective boards, with a competent executive team.
We assess applicants for key positions to make sure they are up to the job and that they carry out their role effectively. In some cases, for example SMFs in higher-impact firms, we may also ask to interview the candidate.
If your firm is applying for an individual to hold an SMF, use our guidance below about the evidence we need to see, what an interview would involve and considerations for dual-regulated firms.