Senior Management Functions (SMFs) Explained: Every SMF, Who Needs It and What Changes in 2027

A Senior Management Function (SMF) is one of the most senior roles in a UK regulated firm, and the person who holds it must normally be approved by the FCA or the PRA before they start. There are more than 25 SMFs across the two regulators, from SMF1 (Chief Executive) to SMF29 (Limited Scope). Which ones your firm needs depends on whether it is solo-regulated or dual-regulated and, for solo-regulated firms, on whether it is a Limited Scope, Core or Enhanced firm. This guide lists every current SMF, explains what holding one means for the individual, and sets out what the FCA's CP26/37 and the PRA's CP14/26 would change from the second half of 2027.

What an SMF is and why the holder is personally accountable

The Senior Managers and Certification Regime (SM&CR) is the UK's individual accountability regime. Its first part, the Senior Managers Regime, makes the most senior decision makers in a firm identifiable and answerable for their own areas. Under section 59 of the Financial Services and Markets Act 2000 (FSMA), a firm must take reasonable care that no one performs a controlled function without approval. An SMF is a controlled function that the regulator has designated as a senior management function. The FCA lists its functions in SUP 10C.4.3R and sets out which apply to which firms in SUP 10C Annex 1.

Holding an SMF brings three personal consequences:

• A Statement of Responsibilities, the document the regulator holds that lists what this person answers for.
• The Senior Manager Conduct Rules, four extra rules on top of the Individual Conduct Rules that apply to almost all staff.
• The Duty of Responsibility in section 66A(5) of FSMA: if the firm breaches a requirement in an area the senior manager runs, and they did not take the steps a person in their position could reasonably be expected to take, the FCA can take action against them personally.

The firm must also be satisfied that every SMF holder is fit and proper before applying and at least once a year afterwards, as the FCA's Senior Managers Regime page explains.

The three FCA tiers and dual-regulated firms

Firms regulated only by the FCA (solo-regulated firms) fall into one of three tiers. A firm works out its own tier using the rules in SYSC 23 Annex 1.

• Limited Scope: firms with reduced requirements, such as sole traders, limited permission consumer credit firms, claims management companies, funeral plan firms and some insurance intermediaries whose main business is not insurance.
• Core: the baseline tier, covering most FCA solo-regulated firms.
• Enhanced: a small number of larger firms. A firm is Enhanced if, for example, it has £65bn or more in assets under management, £45m or more in intermediary regulated revenue or £130m or more in consumer credit lending revenue (each as a three-year rolling average), 10,000 or more regulated mortgages outstanding as a non-bank lender or administrator, or is CASS large, according to the FCA's categorisation page.

Dual-regulated firms are supervised by both the PRA and the FCA: banks, building societies, credit unions, insurers and some investment firms. For them, most SMFs are PRA functions approved by the PRA with FCA consent, and a shorter list is approved by the FCA alone.

Most Limited Scope firms have no governing functions at all: the FCA's own example is a Limited Scope company where one director holds SMF29 and the other directors need no approval. The governing functions (SMF1, SMF3, SMF9 and SMF27) reach Limited Scope firms only in narrow cases, such as a sole trader large enough to set up a governing body or a consumer credit appointed representative with limited permission.

An SMF applies only if someone actually performs that role, or if the Handbook requires the firm to have it. A Core firm without a chair does not have to appoint one because of the SM&CR. The FCA's guide for solo-regulated firms gives a worked example: a Core company with two executive directors needs both approved as SMF3, one of them also as SMF1 if they act as chief executive, the chair as SMF9, and SMF16 and SMF17 allocated to approved people.

Every current SMF

The table lists every FCA and PRA SMF in force on 2 November 2026, who it applies to, and what the Phase 2 consultations propose. "Notified" means the firm would vet the person and tell the regulator, instead of waiting for approval. Proposals are not yet law.

Two points often missed. First, at dual-regulated firms an FCA governing function such as SMF3 is not needed separately where the person is already PRA-approved for a PRA function and the firm told the PRA they would also perform the FCA role, under the overlap rule in SUP 10C.9. Second, the Head of Legal is excluded from the Senior Managers Regime because of legal privilege.

Prescribed responsibilities

Prescribed responsibilities are specific duties the rules say a firm must give to one of its senior managers, in addition to the ordinary responsibilities of their role. They are set out in SYSC 24, and the table in SYSC 24 Annex 1 4.2R shows which apply to which solo-regulated firm. Limited Scope firms have none.

Each prescribed responsibility should go to the most senior person responsible for that area. Guidance in SYSC 24 Annex 2 says, for Core firms, that (a), (b) and (b-1) most naturally sit with SMF1 (or SMF19 at a branch), and that giving (a) or (b) to the chair, SMF16 or SMF17 is harder to justify. Since 10 July 2026, solo-regulated firms may also allocate any prescribed responsibility to an SMF18 holder.

CP26/37 proposes to keep only four: (a) Senior Managers Regime, (d) financial crime and (z) CASS for Core and Enhanced firms, and (j-3) outsourced internal audit for Enhanced firms only. The FCA says removing a prescribed responsibility does not remove the underlying duty, and Core firms would not need to update Statements of Responsibilities solely because of this change.

Statements of Responsibilities and the management responsibilities map

Every SMF holder needs a Statement of Responsibilities. It must be clear, concise and self-contained, list any prescribed responsibilities, and describe the other areas the person answers for. A person holding several SMFs at one firm needs one statement covering all of them. Since 24 April 2026, firms notify significant changes within six months and may send only the latest version.

A management responsibilities map is a single document showing how all senior management responsibilities fit together across the firm, with reporting lines. It applies to Enhanced and dual-regulated firms. Our guide to Statements of Responsibilities and management responsibilities maps covers drafting.

Conduct Rules and the Duty of Responsibility

The Individual Conduct Rules in COCON 2.1 apply to SMF holders as to almost everyone else: act with integrity; act with due skill, care and diligence; be open and cooperative with the FCA, the PRA and other regulators; pay due regard to customers' interests and treat them fairly; observe proper standards of market conduct; and act to deliver good outcomes for retail customers.

SMF holders also follow four Senior Manager Conduct Rules:

• SC1: take reasonable steps to ensure the business you are responsible for is controlled effectively.
• SC2: take reasonable steps to ensure that business complies with the regulatory system.
• SC3: take reasonable steps to ensure any delegation is to an appropriate person and is overseen effectively.
• SC4: disclose appropriately any information the FCA or PRA would reasonably expect notice of.

From 1 September 2026, the rules also reach serious non-financial misconduct such as bullying and harassment, explained in our article on the FCA non-financial misconduct rules.

The Duty of Responsibility asks one question when something goes wrong in a senior manager's area: did they take the steps a person in their position could reasonably be expected to take? DEPP 6.2 lists what the FCA considers, including the person's role, the information they had, how they delegated and whether they ensured an orderly handover. Our guide to reasonable steps shows how to evidence them.

How approval works

The firm applies on Form A through the FCA's Connect system, with a long version for first-time candidates or anyone not approved in the last six months. An internal move between functions uses Form E. A standalone long Form A carries a category 1 fee. The application includes:

• the candidate's employment history for ten years and all directorships in that period
• the Statement of Responsibilities and, at Enhanced and dual-regulated firms, the management responsibilities map and a handover summary
• the firm's fitness and propriety assessment against FIT: honesty, integrity and reputation; competence and capability; and financial soundness
• regulatory references from every employer in the last six years under SYSC 22, which firms should now provide within four weeks of a request
• a criminal records check, which is valid for six months and not needed for an internal or intragroup move
• a skills gap analysis, learning plan and capacity assessment

Under section 61 of FSMA, the regulator must decide within three months of receiving the application, and the clock stops while it waits for information it has asked for. The FCA has committed to deciding within two months and to completing at least half of approvals within 35 days, and a planned change to the law would cut the statutory deadline to two months. The FCA may interview the candidate and will say in advance what it wants to discuss.

Starting before approval is a breach. Under section 63A of FSMA, the FCA can fine a person who performs a controlled function without approval if they knew, or should have known. The exception is the temporary cover rule in SUP 10C.3A: where an absence is temporary or reasonably unforeseen, someone can cover for up to 12 weeks, and if the firm submits a complete application within that time they can continue until the regulator decides.

Holding more than one SMF

One person can hold several SMFs, which is normal at smaller firms. An executive director who is also the money laundering reporting officer holds SMF3 and SMF17. The firm applies for each function, on the same form if made together, and the person has one Statement of Responsibilities covering every role. A chief executive can also chair the board unless a rule prevents it, in which case both SMF1 and SMF9 are applied for. The FCA will look at capacity: whether the person has time for every role, and whether combining them creates a conflict, for example between running the business and overseeing compliance.

What CP26/37 changes, function by function

The FCA's CP26/37 and the PRA's CP14/26 were published on 22 October 2026 and close on 22 January 2027. Final rules are expected in the first half of 2027 and would apply around six months later, subject to the Bill. Our article on SM&CR Phase 2 covers the whole package. For individual SMFs:

• SMF1, SMF2, SMF3, SMF4, SMF9, SMF16, SMF17, SMF19, SMF27 and SMF29: stay approved. The FCA proposes no change to SMF roles at Core and Limited Scope firms.
• SMF5, SMF10, SMF11, SMF12, SMF13, SMF14 and SMF15: become notified at dual-regulated and Enhanced firms. The firm completes the same vetting and the holder keeps the same Conduct Rules and Duty of Responsibility.
• SMF7: at solo-regulated firms, limited to people with significant influence who also perform one of seven group functions (chief executive, chief finance, chief risk, chief operations, chair, compliance oversight or MLRO). The FCA expects about 40% fewer SMF7s.
• SMF18 and SMF22: removed, with their responsibilities moved to other SMFs.
• SMF24: stays approved because of AI and cyber risk, with a joint review two years after implementation.
• PRA functions: SMF6, SMF8, SMF20 and SMF20a become notified, with a new notified SMF7a.

Changes for every SMF: temporary cover rises from 12 to 18 weeks, with a "reasonable use" test replacing "reasonably unforeseen" for FCA functions; revised Statements of Responsibilities are kept internally and provided on request instead of being filed, kept for six years; firms where one person performs every SMF need no statement at all; and Enhanced, dual-regulated and solo firms in dual-regulated groups could apply for time-limited or conditional approval.

Which SMFs does your firm need?

1. Confirm whether you are solo-regulated or dual-regulated.
2. For solo-regulated firms, work out your tier under SYSC 23 Annex 1, including the Enhanced thresholds.
3. List the roles people actually perform: chief executive, executive directors or partners, and chair.
4. Add the required functions your permissions trigger: SMF16 where the rules require a compliance function, SMF17 where the money laundering rules apply, and SMF29 if you are a Limited Scope firm.
5. If you are Enhanced, add the finance, risk, internal audit and operations heads, the committee chairs and the senior independent director, any group SMF7s and SMF18 where an area has no other senior manager.
6. Allocate the prescribed responsibilities, draft each Statement of Responsibilities and, if needed, the management responsibilities map.
7. Check whether any role would become notified or removed under CP26/37 before making long-term appointments.

Cryptoasset firms applying in the window that closes on 28 February 2027 must build the SM&CR into their application, because the regime applies to authorised cryptoasset firms from 25 October 2027. Buckingham Capital Consulting's guide to SM&CR for cryptoasset firms covers the roles those applicants need. Pure payment institutions and e-money institutions sit outside the SM&CR, as explained in our article on SM&CR for payment institutions and EMIs.

How we support senior managers

We work with the individual as well as the firm. Our Senior Manager training is one-to-one and built on the person's own Statement of Responsibilities, so the reasonable steps they practise are the ones they will be judged on. Our SM&CR support covers tier assessment, SMF mapping, prescribed responsibility allocation, Statements of Responsibilities, Form A applications and fitness and propriety files, FCA interview preparation, handovers and planning for CP26/37. Our guides to SMF16 compliance oversight and SMF1 chief executive are good places to start for the two roles most firms appoint first.