What SMF18 Covers

SMF18 is sometimes called the catch-all function. It ensures that anyone with overall responsibility for a significant area of a larger firm is within the Senior Managers regime, even if no more specific function applies. It applies at Enhanced solo-regulated firms and at banks and insurers, but not at Core firms. A person has overall responsibility if they have ultimate responsibility, under the board, for managing or supervising that area, and are not already approved for another Senior Manager Function. Our guide to SMF18 explained covers the function in detail, and the definitions are in the FCA’s SUP 10C. The FCA’s guide to the SMCR for solo-regulated firms gives worked examples.

An SMF18 holder needs approval before taking the role, has a Statement of Responsibilities, and is subject to the Senior Manager Conduct Rules and the Duty of Responsibility. For a senior business head moving from a firm where they weren’t a Senior Manager, that is a significant change.

Roles That Often Fall Under SMF18

These are examples only. Whether a particular role needs SMF18 depends on the firm’s structure, who else is approved and how responsibilities are allocated on the responsibilities map. Some heads of function will hold a more specific designation instead, such as SMF24 for the chief operations function.

SMF18 or SMF3?

The question we’re asked most about SMF18 is how it differs from SMF3, the Executive Director function. The short answer is the board seat. SMF3 applies to executives who sit on the board. SMF18 applies at Enhanced firms to people with overall responsibility who are not otherwise approved, whether or not they’re on the board. Getting this right before recruiting matters, because it changes the job description, the Statement of Responsibilities and the application. Our guide to SMF3 or SMF18 works through the decision, and our SMF3 executive director recruitment page covers board-level hires.

Why SMF18 Searches Are Different

Many SMF18 candidates are excellent senior business leaders who have never held a Senior Manager Function. They may have run large teams and P&Ls under someone else’s approval, or come from firms or sectors where their role wasn’t designated. That creates three challenges:

• Evidencing competence for the regulator. A first-time Senior Manager must show their experience matches the responsibilities they will hold. We help candidates and firms present that clearly.
• Understanding accountability. The candidate must understand what personal accountability under the Duty of Responsibility means in practice, and be comfortable with it.
• Candidate concerns. Some strong candidates hesitate at personal regulatory exposure. A well-defined Statement of Responsibilities and good support from the firm often resolve those concerns.

How We Run an SMF18 Search

• Confirm the designation. We check whether the role is SMF18, SMF3 or a more specific function, and agree a draft Statement of Responsibilities.
• Brief against accountability. We define what the person will be accountable for, not just their job title, and how the role fits with the rest of the Senior Manager team.
• Direct search. We approach senior business heads at comparable firms, including those who haven’t held an SMF before but have run equivalent areas.
• Fit and proper pre-assessment. Every candidate is checked against the fit and proper test, with regulatory references planned early.
• Personal interviews. Adrian Lawrence FCA interviews every shortlisted candidate, including how they understand Senior Manager accountability.
• Approval support. We help with the Form A and prepare first-time Senior Managers for possible regulatory interview; see preparing for an approval interview.

What We Look For in SMF18 Candidates

SMF18 and Firms Becoming Enhanced

Many SMF18 searches follow a firm crossing the threshold from Core to Enhanced. At that point, senior people who were previously certified staff, or covered by SMF3, may need approval in their own right. Firms should identify those roles early, because approvals take time and some existing post-holders may not be the right long-term fit. Our guide to becoming an Enhanced firm sets out the hires that come with the change, and our governance and SMF structure review can help map the new structure.

Supporting a First-Time Senior Manager

When a firm appoints someone who has never held a Senior Manager Function, a little preparation goes a long way. Before the application, the firm should walk the candidate through their draft Statement of Responsibilities, the Conduct Rules and how the Duty of Responsibility works in practice. After approval, a structured induction, clear management information for their area and regular contact with compliance and risk help the new SMF18 build the record of reasonable steps that protects both them and the firm. Our guide to Conduct Rules training is a useful starting point, and our guide to due diligence before accepting an SMF role sets out what candidates will want to know.

Timing and Pay

An SMF18 search typically takes three to five weeks to shortlist. Senior business heads often have long notice periods and deferred bonuses, so firms should plan for buy-outs and for the regulator’s assessment period; see structuring an SMF offer and how long an SMF appointment takes. Pay reflects the scale of the business area; our salary guide gives benchmarks.

Frequently Asked Questions

Which firms have SMF18?

Enhanced solo-regulated firms, banks and insurers. Core firms don’t have SMF18.

Does an SMF18 have to sit on the board?

No. SMF18 applies to people with overall responsibility whether or not they sit on the board. Executives on the board usually hold SMF3 or a more specific function.

Can someone who has never been a Senior Manager be approved as SMF18?

Yes, if they can show the competence and experience the role requires. First-time Senior Managers need careful preparation, which we help with.

How long does an SMF18 appointment take?

Shortlisting typically takes three to five weeks, with notice periods and up to three months for the regulator’s decision on a complete application.

Can you help us decide whether a role is SMF18?

We can talk it through with you as part of the brief, though the final view on designations should rest with your compliance and legal advisers.