SMF19 Head of Third Country Branch: Who Needs It, Accountability and 2026 Changes

SMF19, the Head of Third Country Branch function, is held by the person responsible for running the UK branch of a firm whose head office is outside the UK. For FCA solo-regulated branches the FCA approves the holder; for branches of overseas banks and insurers the PRA approves an equivalent SMF19, with FCA consent. It is an approved role today and stays approved under the 2026 proposals: neither CP26/37 nor the PRA's CP14/26 would make it a notified role. What changes is the set of responsibilities around it.

What SMF19 covers

SUP 10C.5.24R applies to an overseas SMCR firm, meaning a firm with its head office outside the UK that carries on regulated business through a UK branch. It defines SMF19 as having responsibility, alone or jointly with others, for the conduct of all activities of the UK branch that are subject to the UK regulatory system.

In plain words, the SMF19 is the person the regulators treat as in charge of the branch. Common job titles are UK branch manager, UK country head, UK chief executive or general manager of the UK branch. The role can be shared: two people jointly responsible for the whole branch can both hold SMF19.

People at head office whose role in the branch is only strategic, such as setting group strategy without implementing it, generally do not need approval (SUP 10C.1.5AG). The person who actually runs the branch day to day does.

Example: a US investment bank's UK branch is authorised by the FCA as a Core firm. Its managing director for the UK runs the branch, signs off its business plan and is the main contact for the FCA. She is the SMF19. The group's chief executive in New York sets global strategy but does not direct the branch's daily business, so he is outside the regime.

For banks and insurers, the PRA has its own function with the same number. The PRA Rulebook calls it the Head of Overseas Branch for third country banks and the Head of Third Country Branch for insurers, and requires a third country bank to ensure that at least one person performs it. The FCA's own SMF19 therefore applies to branches the FCA alone regulates.

Which firms need an SMF19

The FCA tables are in SUP 10C Annex 1 and the PRA functions in the PRA Rulebook. A Core branch will usually also need an SMF17, and where its rules require one, an SMF16. Executive directors of the branch hold SMF3.

What the SMF19 holder is personally accountable for

The SMF19 needs a Statement of Responsibilities, the document the regulator holds that sets out what this person answers for. For a branch head it will usually cover the whole of the branch's UK regulated business, so it should state clearly which activities, if any, sit with other senior managers.

Prescribed responsibilities are specific duties a firm must give to a named senior manager. For a Core third country branch they are (a) the Senior Managers Regime, (b) the Certification Regime, (b-1) the Conduct Rules, (d) financial crime, (z) CASS where it applies, (aa) management of the branch's risk processes in the UK, (ff) compliance with the UK regulatory system and (ee) escalating regulators' correspondence to the governing body, with (za) for authorised fund managers. The FCA's allocation guidance in SYSC 24 Annex 2, added by PS26/6, names SMF19 as the most likely holder of (a), (b), (b-1), (aa), (ee) and (ff). In a small branch the SMF19 often holds most of them.

The SMF19 must follow the Individual Conduct Rules in COCON and the four Senior Manager Conduct Rules:

• SC1: take reasonable steps to ensure the branch business they are responsible for is controlled effectively
• SC2: take reasonable steps to ensure it complies with the UK regulatory system
• SC3: delegate only to appropriate people and oversee them effectively
• SC4: disclose appropriately anything the FCA or PRA would reasonably expect to know

The Duty of Responsibility in section 66A(5) FSMA (section 66B for the PRA) means the regulator can take action against the SMF19 personally if the branch breaches a requirement in their area and they did not take the steps a person in their position could reasonably be expected to take. Our guide to reasonable steps explains the standard.

Reasonable steps in practice

A branch head answers to UK regulators and to head office at the same time. The evidence should show that UK requirements were followed even where group processes came from abroad.

The first 90 days in the role

• Agree your Statement of Responsibilities and the prescribed responsibilities you will hold.
• Read the branch's last two years of regulatory correspondence and any open supervisory actions.
• Map which branch functions are run from head office or other group offices and who oversees each.
• Set up branch management information and a regular reporting line to head office.
• Meet the branch SMF16 and SMF17 and agree how issues reach you.
• Plan how much time you will spend in the UK if you are based elsewhere.

Applying for approval

For an FCA solo-regulated branch, the firm applies on Form A through Connect. For a bank or insurer branch, the application goes to the PRA, which needs FCA consent. The FCA application page requires the completed form, the candidate declaration, a Statement of Responsibilities and supporting documents. The firm must first be satisfied that the candidate is fit and proper under FIT: honest, competent and financially sound.

• Regulatory references from the current employer and anyone who employed the candidate in the past six years (SYSC 22.2.1R).
• A criminal records check, valid for six months since 24 April 2026 and not needed for an internal or intragroup move.
• Competence, including knowledge of UK rules. The FCA says it considers approvals from foreign regulators and overseas experience, but assesses every candidate itself and will focus on understanding of the UK regulatory system.
• Location. The FCA accepts that some day-to-day work can be done from abroad but expects senior managers to spend time in the UK consistent with their responsibilities, and the firm may need to explain how oversight will work.
• A possible interview where the regulator applies its highest level of scrutiny.

Section 61 FSMA allows three months from a complete application, with the clock stopped while requested information is outstanding. The FCA has committed to decide within two months. Performing SMF19 without approval breaches section 59 FSMA and can lead to a personal penalty under section 63A. For FCA functions, the temporary cover rule gives a firm 12 weeks to submit an application where the absence is temporary or reasonably unforeseen.

What CP26/37 would change for SMF19

SMF19 itself is not affected. CP26/37 makes no change to senior manager roles at Core and Limited Scope firms, and the PRA's CP14/26 keeps the Head of Overseas Branch as a pre-approved function. The proposals apply to third country branches, so several things around the role would change:

• Prescribed responsibilities would fall to A, D and Z for Core firms. The branch-specific responsibilities (aa), (ff) and (ee) would go, as would (b), (b-1) and (za), though the duties behind them remain.
• Revised Statements of Responsibilities would no longer be filed. The branch keeps them current, retains old versions for six years and provides them on request.
• Temporary cover would extend from 12 to 18 weeks, with "reasonable use" replacing "reasonably unforeseen" for FCA functions. The PRA keeps its test for its own functions.
• SMF22 would be removed at bank and insurer branches, so local responsibilities held by SMF22s would move, often to the SMF19.
• The requirement in SUP 15.4 for overseas firms to report notified persons, and Form F, would be removed.
• The Certification Regime and Directory would be removed, which ends the annual certification work many branch heads oversee today.

Responses close on 22 January 2027 and changes are expected in the second half of 2027. Our SM&CR Phase 2 article covers the package.

Holding SMF19 with other functions

A branch head can also be an executive director (SMF3) where the branch has a governing body. In a small Core branch the SMF19 sometimes also holds SMF16 or SMF17, but combining branch leadership with compliance oversight or the MLRO role reduces independent challenge, and the firm should explain in the application how that risk is managed. SMF19 often holds most prescribed responsibilities: check the Statement of Responsibilities stays readable and that the workload is realistic. If the person also holds a group role, consider whether they should hold SMF7 at another UK group firm.

How we support SMF19 holders

We support branch heads and their head offices through approval and the changes Phase 2 brings to branch responsibilities. Our SM&CR support covers:

• one-to-one Senior Manager training built on the person's own Statement of Responsibilities
• drafting and review of the Statement of Responsibilities
• the Form A application and the fitness and propriety file behind it
• preparation for an FCA or PRA interview
• handover arrangements when the role changes hands

The Senior Management Functions guide sets out how SMF19 fits with the other roles.