Prescribed Responsibilities Explained: Who Must Own What Under the SMCR
Prescribed Responsibilities are specific responsibilities that the regulators require every firm to allocate to one of its Senior Managers, such as responsibility for the firm’s financial crime policies or for its compliance with the Senior Managers regime itself. They make sure that the areas the regulators care most about always have a named, accountable person. This guide explains what Prescribed Responsibilities are, which ones apply to which firms, how to allocate them, and the mistakes firms most often make.
What Is a Prescribed Responsibility?
Under the Senior Managers and Certification Regime, Senior Manager Functions describe roles, such as chief executive or compliance officer. Prescribed Responsibilities describe specific areas of accountability that must be allocated to a Senior Manager, whatever the firm’s structure. They’re set out in SYSC 24 of the FCA Handbook. Dual-regulated firms must also allocate the PRA’s Prescribed Responsibilities, set out in the PRA Rulebook.
The idea is simple: certain responsibilities are too important to be left unallocated or vaguely shared. Every applicable Prescribed Responsibility must be held by a Senior Manager, and recorded in that person’s Statement of Responsibilities.
Which Prescribed Responsibilities Apply?
The number of Prescribed Responsibilities depends on the firm’s tier:
| Firm type | Prescribed Responsibilities |
|---|---|
| Limited Scope firms | A very limited set, reflecting the pared-back regime |
| Core firms | A core set, covering areas such as the firm’s obligations under the Senior Managers and Certification Regimes, Conduct Rules training and reporting, and financial crime |
| Enhanced firms | The core set plus many more, covering areas such as culture, the risk, compliance and internal audit functions, remuneration and, at relevant firms, whistleblowing |
| Dual-regulated firms | FCA Prescribed Responsibilities plus the PRA’s, covering prudential matters |
Some Prescribed Responsibilities apply only to firms with particular activities, such as firms holding client money or assets (CASS), authorised fund managers, or firms required to have a whistleblowers’ champion. Check the current list in SYSC 24 against your firm’s tier and activities. Our guide to which SMFs apply at which firm tier sets out the differences.
Examples of Common Prescribed Responsibilities
| Prescribed Responsibility | Usually held by | Related guide |
|---|---|---|
| The firm’s performance of its obligations under the Senior Managers regime | Chief executive or compliance officer | SMF explained |
| The firm’s performance of its obligations under the Certification Regime | Chief executive, HR-responsible Senior Manager or compliance officer | Certification Regime |
| Conduct Rules training and reporting | Compliance officer or HR-responsible Senior Manager | Conduct Rules training |
| The firm’s policies and procedures for countering the risk of financial crime | MLRO, compliance officer or chief executive | MLRO explained |
| Compliance with the client assets rules (CASS), where applicable | Chief operating officer or finance director | CASS explained |
| Oversight of the firm’s culture (Enhanced firms) | Chair or chief executive | SMF9 Chair |
| Acting as whistleblowers’ champion (relevant firms) | Independent non-executive | Whistleblowers’ champion |
These are typical allocations, not rules. The right holder depends on the firm’s structure and who has the authority and expertise to discharge the responsibility.
How to Allocate Prescribed Responsibilities
Allocate Every One That Applies
Each applicable Prescribed Responsibility must be allocated to a Senior Manager. Leaving one unallocated is a breach in itself.
Allocate to Someone Who Can Discharge It
The holder should have the authority, expertise and time to make the responsibility real. Allocating everything to the chief executive by default is common at smaller firms, but it can leave the chief executive accountable for areas they can’t realistically oversee.
Use the Regulators’ Wording
Record each Prescribed Responsibility in the holder’s Statement of Responsibilities using the wording in the rules, rather than a paraphrase. Our Statement of Responsibilities template includes a section for this.
Share Only With Care
Some Prescribed Responsibilities can be shared or divided between Senior Managers, for example in a job share. Where that happens, each holder is accountable, and the Statements of Responsibilities must explain clearly how the responsibility is divided. Vague sharing creates exactly the accountability gaps the regime is designed to prevent.
Reallocate When People Leave
When a Senior Manager leaves, their Prescribed Responsibilities must be reallocated, temporarily if necessary, so that none is left without a holder. Our guide to the 12-week rule explains how temporary cover works.
Prescribed Responsibilities at Enhanced Firms
Enhanced firms have the longest list, and must record the allocation of every Prescribed Responsibility in their Responsibilities Map. They must also make sure every business area and management function has a Senior Manager with overall responsibility, which is a separate requirement from Prescribed Responsibilities. Firms becoming Enhanced often find they need additional Senior Managers to hold the extra responsibilities. See becoming an Enhanced firm and our Responsibilities Map template.
Common Mistakes
- Missing Prescribed Responsibilities that apply because of a specific activity, such as CASS.
- Everything allocated to the chief executive, regardless of capacity or expertise.
- Paraphrased wording that doesn’t match the rules.
- Unclear sharing, with no explanation of who does what.
- No reallocation when a Senior Manager leaves or changes role.
- Inconsistency between Statements of Responsibilities and the Responsibilities Map.
A Core investment firm’s chief executive held every Prescribed Responsibility. When the firm began holding client money, its compliance officer noticed that the CASS Prescribed Responsibility hadn’t been allocated at all. In reviewing its allocations, the board moved the CASS responsibility to its finance director, who ran client money reconciliations, and the financial crime responsibility to its MLRO, and updated each Statement of Responsibilities.
The Duty of Responsibility
Holding a Prescribed Responsibility brings it within the Duty of Responsibility. If the firm breaches a regulatory requirement in an area a Senior Manager is responsible for, the regulator can take action against that Senior Manager if they didn’t take reasonable steps to prevent the breach. That’s why holders should be able to show what they did to oversee each responsibility: the management information they received, the challenge they made and the actions they took. Our analysis of FCA enforcement trends looks at how this works in practice.
When Allocations Point to a Hire
Reviewing Prescribed Responsibilities often reveals that a firm needs another Senior Manager: an MLRO to take financial crime, a chief operating officer to take CASS, or an independent non-executive to act as whistleblowers’ champion. Our governance and SMF structure review looks at allocations across your Senior Managers, and our role pages cover the people you may need.
Allocating Accountability
Services and guides for firms reviewing their Prescribed Responsibilities. Every SMF search is led personally by Adrian Lawrence FCA
Executives and Board
Senior holders.
→ Chief Operating Officer (SMF24)
→ Chair and committee chairs
Templates
Documenting allocations.
→ Statement of Responsibilities template
→ Responsibilities Map template
Every SMF search is led personally by Adrian Lawrence FCA
Frequently Asked Questions
Where are the Prescribed Responsibilities listed?
The FCA’s are in SYSC 24 of its Handbook. Dual-regulated firms must also allocate the PRA’s, set out in the PRA Rulebook.
Can a Prescribed Responsibility be held by someone who isn’t a Senior Manager?
No. Each must be allocated to an approved Senior Manager.
Can two Senior Managers share a Prescribed Responsibility?
In some circumstances, yes, but each is accountable and the division must be clearly explained.
What happens if a Prescribed Responsibility is left unallocated?
The firm would be in breach of the rules. Firms must reallocate responsibilities promptly when Senior Managers leave or change roles.
Are Prescribed Responsibilities the same as Senior Manager Functions?
No. Senior Manager Functions are roles that need approval. Prescribed Responsibilities are specific areas of accountability allocated to people holding those roles.
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 leads every SMF Capital search personally, starting each one from the Senior Manager Function and Prescribed Responsibilities the new appointment will hold. View Adrian’s ICAEW profile.
Need a Senior Manager to Hold a Prescribed Responsibility?
If your allocations show a gap, we can help you fill it with the right Senior Manager. Tell us about your hire.