Regulatory Reporting: Who Actually Supports Your SMF16 and SMF17

The Accountability Doesn’t Stop With the Senior Manager

The compliance officer (SMF16) and MLRO (SMF17) carry personal regulatory accountability. Neither usually prepares the underlying returns. That work sits with finance or a regulatory reporting function: a dedicated reporting manager, a financial controller with a reporting remit or, at smaller firms, a fractional or interim specialist. If that function is weak or under-resourced, the Senior Manager is relying on numbers they can’t stand behind, and when something goes wrong, the accountability still lands with them. Under the Duty of Responsibility, they must show they took reasonable steps, which includes checking that the reporting process is sound. See reasonable steps explained.

What Regulatory Reporting Covers

The returns a firm submits depend on its permissions and type. Most are submitted to the FCA through RegData.

From 18 March 2027, new operational incident and third-party reporting rules add further obligations. See FCA regulatory reporting explained and REP-CRIM explained.

The Standard the Work Must Meet

Regulatory returns aren’t management reports where an estimate is good enough. They are formal submissions to the regulator. Late or wrong returns, especially on capital, liquidity or client money, are serious matters in their own right, whatever the health of the business. The FCA can and does fine firms for reporting failures, and late submission can lead to administrative fees and closer supervision.

That means the person responsible needs more precision and process discipline than most management accountants bring to internal reporting, and a real understanding of what each return measures, not just how to fill in the template. Good practice includes:

• a reporting calendar with owners, preparers and reviewers for every return;
• documented methods for each figure, so the return can be reproduced;
• a review by someone who understands the rules before submission;
• reconciliation to the accounts and other returns; and
• a record of resubmissions and their causes, reported to the board.

A Common Career-Stage Problem

We often see a firm extend a capable financial controller’s remit to cover regulatory reporting because the compliance officer needs more support. It is a natural instinct, but regulatory reporting is a specific technical discipline, and a strong general FC doesn’t automatically have it. Before extending the role, ask specific questions: which returns have they prepared before, under which framework, and how did they handle errors? See financial controllers for FCA-regulated firms.

What a Strong Regulatory Reporting Hire Looks Like

• Hands-on experience of the returns your firm submits, not adjacent experience they assume will transfer
• Understanding of what each return measures and why
• A record of catching and fixing errors before submission rather than after a regulator’s query
• Comfort working with the compliance officer and MLRO as a technical partner, explaining what the numbers show and where the limits are
• System skills: building reports from the ledger and other systems, rather than rekeying

Fractional and Interim Support

Not every firm needs a full-time reporting specialist. Fractional and interim specialists are common at smaller firms, around authorisation, a change in permissions, a new reporting regime such as the 2026 safeguarding return, or a period when the in-house team needs more depth. A few days a month from someone who has prepared the same returns at similar firms is often better value than a full-time generalist. See fractional and interim cover.

How the SMF16 and SMF17 Should Oversee It

The compliance officer and MLRO don’t need to prepare returns, but they should understand which ones the firm submits, check the process and controls, review key returns or their outputs, follow up errors and resubmissions, and report on reporting quality to the board. Including regulatory reporting in the compliance monitoring programme gives independent assurance. The MLRO should be closely involved in REP-CRIM and fraud reporting, because the data says a lot about the firm’s financial crime risk.

Warning Signs in Your Reporting

• Returns are prepared in the last two days before the deadline
• Only one person knows how a key return is put together
• Figures are rekeyed from spreadsheets rather than drawn from systems
• Resubmissions happen and nobody tells the board
• The compliance officer can’t say which returns the firm submits or when
• The FCA has queried a return and the answer took weeks

Any one of these is worth fixing. Several together suggest the compliance officer is relying on a process they can’t defend.

Questions to Ask Reporting Candidates

• Which returns have you prepared, under which framework, and for what size of firm?
• Talk us through how you build one of them from the ledger. Where are the judgements?
• What was the most significant error you found before submission, and how did you find it?
• Have you dealt with an FCA query on a return? What happened?
• How did you work with the compliance officer or MLRO, and what did they need from you?

Specific, practical answers show real experience. Answers in general terms usually mean the candidate has reviewed returns rather than prepared them.

Recruiting the Team Together

Where a firm is hiring a compliance officer or MLRO, check the reporting support at the same time. Strong candidates will ask about it at interview, and a weak answer costs good people. We recruit compliance officers and MLROs, and coordinate with our sister practices FD Capital and Accountancy Capital on the finance and reporting roles beside them. See the finance team behind your SMF16 and SMF17.

Frequently Asked Questions

Does the compliance officer prepare regulatory returns?

Usually not. Finance or a reporting specialist prepares them; the compliance officer oversees the process and reviews key returns.

Is the SMF16 accountable for reporting errors?

The Senior Manager responsible must show reasonable steps, which includes checking the reporting process is sound.

How are returns submitted?

Most are submitted to the FCA through RegData.

What changed in 2026?

Payment and e-money firms must submit a monthly safeguarding return from May 2026, and new incident and third-party reporting rules start in March 2027.

Can a small firm use a fractional reporting specialist?

Yes. A few days a month from someone experienced in the same returns is often better value than a full-time generalist.