Head of Third Country Branch Recruitment: SMF19
Overseas banks and insurers operating through a UK branch need one person the UK regulators can hold accountable for everything the branch does. That person holds SMF19, the Head of Third Country Branch function, and must be approved by the PRA, with FCA consent, before they start. Finding them is hard. The candidate must be able to run a UK business, deal confidently with UK supervisors and work effectively with a head office in another country. SMF Capital recruits SMF19 branch heads, and the compliance and financial crime leaders who work alongside them, for overseas firms entering or operating in the UK.
Who Needs an SMF19
SMF19 applies to UK branches of banks and insurers headquartered outside the UK that are authorised and supervised by the Prudential Regulation Authority. Since Brexit, that includes branches of EU firms as well as those from the US, Asia and elsewhere. UK-incorporated subsidiaries of overseas groups don’t need an SMF19; they have their own board and the normal Senior Manager structure. Our guide to SMF19 explained covers the function in detail, and our guide to SMF approval for overseas firms explains the wider structure.
When Overseas Firms Come to Us
| Situation | What usually needs to happen |
|---|---|
| Establishing a new UK branch | Name an approvable SMF19 in the authorisation application, alongside compliance and MLRO holders. See building an SMF team from scratch. |
| An EU branch moving to full UK authorisation | Approve an existing country manager, or recruit someone with UK Senior Manager experience |
| The current branch head is leaving or returning to head office | Plan succession and cover so the branch is never without an accountable head |
| The regulator has raised concerns about branch governance | Strengthen the SMF19 and branch control functions, sometimes with interim support |
| A branch is converting to a subsidiary | Build a board and a full Senior Manager team; see multi-SMF team builds |
What Makes a Strong SMF19 Candidate
- Experience of running a UK financial services business or a substantial part of one
- A track record of dealing directly with the PRA and FCA, ideally as an approved Senior Manager
- Knowledge of the sector, whether wholesale banking, corporate lending, specialty insurance or reinsurance
- The ability to represent UK regulatory requirements to head office, and to push back when needed
- Experience of working within a matrix structure, with group functions and overseas reporting lines
- Presence in the UK and the availability that the regulators expect of a branch head
- A clean regulatory history that will stand up to PRA scrutiny and, often, a PRA interview
The most common mistake we see is a group appointing a trusted head office executive with no UK experience. That can work, but the approval is harder, and the group usually needs to strengthen the UK compliance function to compensate. Our page on hiring from different backgrounds covers the trade-offs, and internal promotion or external hire applies directly to branch heads.
How We Run an SMF19 Search
- Brief with head office and the UK team. We agree the role, the branch head’s authority and the reporting line to head office, because these shape the candidate profile and the approval.
- Market mapping. We identify UK branch heads, country managers and senior executives at comparable overseas and UK firms, plus UK-experienced executives within your group.
- Direct, confidential search. We approach candidates discreetly and explain the opportunity in terms of the UK role and the group behind it.
- Fit and proper pre-assessment. Every candidate is tested against the fit and proper test before reaching your shortlist.
- Shortlist and interview. Adrian Lawrence FCA interviews every shortlisted candidate personally, including on UK regulatory knowledge.
- Approval support. We help prepare the Form A, the Statement of Responsibilities and the candidate for any PRA interview, and stay involved through to the start date.
Scenario: A European insurer’s UK branch needs a new head as its existing country manager returns to head office. The group’s preferred internal candidate has strong underwriting credentials but no UK Senior Manager experience. We run an external search in parallel and present two UK-approved branch heads from comparable insurers. The group appoints an external candidate as SMF19 and keeps its internal candidate as UK underwriting lead, with a development plan towards a future approval.
The Branch Team Around the SMF19
An SMF19 can only be accountable for the branch if the right people support them. Most branches also need approved individuals for compliance oversight and money laundering reporting, and regulators look closely at whether those roles are adequately resourced in the UK. We regularly recruit branch compliance officers (SMF16) and MLROs (SMF17) alongside the branch head, and senior financial crime leaders where the branch’s risk profile requires it. Where group executives exercise significant influence over the branch, see our guide to group SMF roles.
Timing and Approval
SMF19 is a PRA-designated function, so approval runs through the PRA with FCA consent, and interviews are common. Firms should allow for that from the start; our guide to how long an SMF appointment takes gives realistic timings, and PRA versus FCA dual regulation explains how the two regulators work together. If the branch head leaves before a successor is approved, the 12-week rule may allow temporary cover, but it should be a fallback rather than a plan.
We advertise current branch roles on our jobs page, including our current Head of Third Country Branch vacancy.
Branch or Subsidiary: How the Choice Affects Your Senior Managers
For overseas groups still deciding how to operate in the UK, the legal structure determines the Senior Manager team the regulators will expect. The choice depends on many factors beyond recruitment, including capital, the activities the group wants to carry out and the regulators’ approach to branches of overseas firms, but the people implications are significant.
| UK branch | UK subsidiary | |
|---|---|---|
| Legal entity | Part of the overseas firm | Separate UK company |
| Board | No UK board; governance through head office | UK board with independent non-executives |
| Lead Senior Manager | SMF19 Head of Third Country Branch | SMF1 Chief Executive, plus SMF9 Chair |
| Other typical functions | Compliance oversight and MLRO, plus others depending on activities | The full set for the firm’s type, such as SMF2, SMF4, SMF16, SMF17 and committee chairs |
| Recruitment scale | A small, specialist team | A board and executive team build |
Groups that start with a branch and later convert to a subsidiary need to plan a substantial recruitment programme. Our overseas firms support covers both routes, and our SMF structure review can help a group decide what it will need.
SMF19 Branch Head Recruitment
UK branch leadership for overseas banks and insurers. Every SMF19 search is led personally by Adrian Lawrence FCA
Overseas Firms
UK branches and group structures.
→ Overseas firms support
→ Approval for overseas firms
Branch Control Functions
Compliance and financial crime.
→ Compliance officer (SMF16)
→ MLRO (SMF17)
Search Options
How we run senior searches.
→ Retained executive search
→ Interim cover
Every SMF19 search is led personally by Adrian Lawrence FCA
Frequently Asked Questions
Can a head office executive be our SMF19?
Yes, if they will be based in the UK and can show the regulators they understand the UK regime. Without UK experience, approval is harder and the branch’s compliance function usually needs strengthening.
Do we need an SMF19 if we set up a UK subsidiary instead?
No. A subsidiary has its own board and needs the Senior Manager Functions that apply to its firm type, such as a chief executive and chair.
How long does an SMF19 search take?
Shortlisting typically takes four to six weeks because the candidate pool is narrow. PRA approval, which often includes an interview, adds further time.
Can you recruit the whole UK branch team?
Yes. We regularly recruit the branch head alongside the compliance officer, MLRO and financial crime leadership.
Can you work with our head office overseas?
Yes. Much of our overseas firms work involves briefing and reporting to head office teams abroad as well as UK management.
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, including Exec Capital. He leads every SMF Capital search personally, including branch head appointments for overseas banks and insurers. View Adrian’s ICAEW profile.
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