SMF Approval for Overseas Firms, UK Branches and Group Structures
Many of the enquiries we receive don’t involve a simple UK-incorporated firm. An overseas bank opens a UK branch. A UK subsidiary sits inside an international group. A group restructures and moves Senior Managers between entities. Each of these changes which Senior Manager Functions apply, who approves them and how candidates are assessed. This guide covers the designations and mechanics that matter for overseas firms and groups, and what they mean for recruitment.
Branch or Subsidiary: The First Question
The structure an overseas firm chooses for its UK business decides its Senior Manager framework.
| Structure | What it is | SMF framework |
|---|---|---|
| UK subsidiary | A UK-incorporated company with its own board | The normal SMCR structure for its firm type: SMF1, SMF3, SMF9, SMF16, SMF17 and so on, depending on whether it is Core, Enhanced or dual-regulated |
| Third country branch of a bank or insurer | Part of the overseas legal entity, authorised by the PRA | A modified regime built around SMF19, with SMF22 and other functions where required |
| Branch of an FCA solo-regulated overseas firm | Part of the overseas entity, authorised by the FCA | A lighter, modified set of functions; check the FCA’s rules for branches in SUP 10C |
Since the UK left the EU, branches of EU firms are third country branches for UK purposes. The old EEA branch arrangements, including the EEA Branch Senior Manager function (SMF21), fell away when the temporary permissions regime ended. EU firms with UK branches now fall under the same framework as firms from the US, Asia or elsewhere. Our guide to PRA and FCA dual regulation explains which regulator leads.
SMF19: Head of Third Country Branch
SMF19 applies to the most senior person in the UK branch of an overseas bank or insurer. Because the branch has no board of its own in the UK, the regulators need one person here who is accountable for everything the branch does. The SMF19 holder is that person.
The defining feature of the role is the tension between local accountability and group control. Decisions affecting the branch are often taken at head office by people who are not UK Senior Managers. The regulators expect the SMF19 to have enough authority, information and escalation rights to be genuinely accountable, including the ability to insist on UK requirements when they conflict with a group policy written for another jurisdiction.
Strong candidates usually combine three things: experience inside a branch structure rather than only a standalone UK firm, real knowledge of UK rules rather than only the home regime, and the standing to push back on head office. Our guide to SMF19 covers the function in depth, and our SMF19 recruitment page explains how we run these searches.
SMF22: Other Local Responsibility
In larger branches, one person can’t realistically own every responsibility the regulators require to be allocated locally. SMF22 lets the branch give specific local responsibilities, such as finance and regulatory reporting, to another senior person who isn’t otherwise approved. It is a PRA function, and the allocation has to be clear on the branch’s responsibilities map. See SMF22 explained.
Branches also commonly need an approved compliance officer and MLRO. These are the same SMF16 and SMF17 functions a UK firm has, but the holders must work with group compliance and financial crime teams abroad.
Group Structures: When Group Executives Need Approval
Inside a group, the question is often whether someone employed by the parent or another group company needs approval for a UK regulated entity. Two functions matter most:
- SMF7, Group Entity Senior Manager: applies, mainly at dual-regulated firms, to a group executive who exercises significant influence over the UK firm’s management. In April 2026 the PRA clarified its examples of when SMF7 applies after some firms read the reform proposals as widening it. See SMF7 explained.
- Holding the same SMF at several group firms: a group CRO might hold SMF4 at three regulated subsidiaries. That is legitimate, but each holding needs its own approval and its own Statement of Responsibilities reflecting what the person actually does at that firm.
The risk with multiple holdings isn’t the arrangement itself. It’s a person stretched too thin across several real accountabilities, or a group using one person to save cost without asking whether each firm gets the oversight its risk profile needs. Regulators test time commitment and management information for each entity. Our guide to group SMF roles and our page on holding more than one SMF cover this in more detail.
Form E and Moving Senior Managers Within a Group
When a Senior Manager already approved at one group firm takes an SMF at another, the group can usually use Form E, the internal transfer form, rather than a full Form A. It is quicker to prepare, but it still triggers an assessment, and it only applies within a group as the rules define it. Confirm the relationship qualifies before planning around it. Our guide to Forms B to E sets out when each form applies.
The 2026 reforms help here. From 24 April 2026 the PRA exempts existing SMF holders moving to another SMF within the same group, rather than only the same firm, from a new criminal record check, provided the gap is no more than a month. System changes to Form A and Form E went live on 10 July 2026. Our guide to the SMCR reforms has the full list.
Assessing Candidates With Overseas Careers
Overseas firms often fill senior UK roles by transferring people from head office, and groups often promote across borders. That brings knowledge of the business, but the regulators will test knowledge of UK rules closely. Three practical points:
- References take longer. UK regulatory references only come from UK-regulated employers. For overseas employment, firms need equivalent evidence from overseas employers and regulators, which can take weeks. Start early.
- Interviews are likely. PRA and FCA interviews are common for SMF19 and for candidates whose experience is mainly overseas. See preparing for an approval interview.
- UK presence matters. The regulators expect the head of a UK branch or subsidiary to be here and available. Our guide to working from overseas explains the limits.
Many firms combine a head office transferee with a locally recruited Senior Manager who knows the UK regime well, for example an SMF19 from head office alongside a UK-hired SMF16.
Scenario: A Singapore-headquartered insurer is converting its UK representative office into a PRA-authorised branch. Head office plans to transfer its regional COO as SMF19 and run compliance from Singapore. We advise that the regulators will expect a UK-based compliance officer with local experience, and that the SMF19 candidate needs preparation on UK rules. We recruit a UK SMF16 with branch experience, and the SMF19 candidate completes a structured briefing before his PRA interview. Both are approved in the first cycle.
What This Means for Recruitment
Searches for overseas firms and groups have to start with the structure. Which functions apply? Will the person hold one role or several across the group? What does head office governance already provide, and what accountability has to be built in the UK? Get those answers first and the brief writes itself. A candidate with an excellent record at a domestic UK firm doesn’t automatically have what a branch or complex group needs. Managing the gap between group policy and UK obligations is a separate skill, and we test for it.
Our UK branch and group SMF support service covers overseas firms entering the UK, groups reorganising their regulated entities, and acquisitions of regulated firms. For firms building a whole team at once, see multi-SMF team builds.
Overseas and Group SMF Recruitment
For branches, subsidiaries and groups. Every overseas firm search is overseen by Adrian Lawrence FCA
UK Branches
Branch heads and local Senior Managers.
→ SMF19 recruitment → Overseas and group supportSMF19 explained →
Group Structures
Group roles and multiple holdings.
→ Multi-SMF team build → Governance reviewGroup SMF roles →
Compliance and MLRO
Local SMF16 and SMF17.
→ Combined SMF16/17 → MLRO recruitment (SMF17)SMF22 explained →
Approval
Applications and interviews.
→ SMF authorisation support → Urgent SMF replacementApproval interviews →
Every overseas firm search is overseen by Adrian Lawrence FCA
Frequently Asked Questions
Does a UK subsidiary of an overseas group need an SMF19?
No. SMF19 applies to branches. A UK subsidiary has its own board and the normal Senior Manager structure for its firm type.
Is SMF21 still used?
No. SMF21 was the EEA Branch Senior Manager function. Since the end of the temporary permissions regime, branches of EU firms are third country branches.
Can one person hold an SMF at several group firms?
Yes, but each holding needs separate approval and a Statement of Responsibilities for that firm, and the person must have time to do each properly.
When can a group use Form E?
When a Senior Manager already approved at one group firm moves to an SMF at another firm in the same group, as the rules define it.
Do overseas candidates need regulatory references?
UK references come only from UK-regulated employers. For overseas roles, firms should gather equivalent evidence from overseas employers and regulators.
Will the PRA interview an SMF19 candidate?
Often, especially for larger branches or where the candidate’s experience is mainly overseas.
About the Author
Adrian Lawrence FCA is the founder of SMF Capital. He is a Chartered Accountant and Fellow of the ICAEW, holds a practising certificate in his own name, and is a former listed-company Finance Director with a BSc from Queen Mary College, University of London. He founded FD Capital in 2018 and has since built a network of five specialist recruitment practices. He oversees every SMF Capital search. View Adrian’s ICAEW profile.
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