SMF Designations: A Complete Guide to Every Senior Manager Function

How SMF Designations Work

Under the Senior Managers and Certification Regime, a Senior Manager Function is a role the regulators have designated as carrying the most significant responsibility in a firm. The FCA’s designations are set out in SUP 10C of its Handbook. At dual-regulated firms, such as banks, building societies and insurers, several functions are designated by the Prudential Regulation Authority instead, and the PRA’s rules are in its Rulebook.

Every Senior Manager must be approved before starting, must meet the fit and proper test, needs a Statement of Responsibilities and is subject to the Senior Manager Conduct Rules and the Duty of Responsibility. Which functions a firm needs depends on its tier: Limited Scope, Core or Enhanced. Our guide to which SMFs apply at which firm tier sets out the mapping in detail, and our Senior Manager Functions explained guide covers the regime as a whole.

Every Designation at a Glance

Whether a function applies depends on the firm’s tier, its structure and whether it has that role. The table is a guide; always check the current rules for your firm.

Executive Functions

SMF1 Chief Executive

Responsible, under the immediate authority of the board, for carrying out the management of the conduct of the whole of the firm’s business. Approval for SMF1 is among the most closely scrutinised, and regulator interviews are common. See our SMF1 guide and regulated CEO recruitment.

SMF2 Chief Finance

Responsible for managing the firm’s financial resources and reporting to the board on them. See our SMF2 guide, SMF2 CFO recruitment and our article on why an SMF2 search should start with a CFO recruiter.

SMF3 Executive Director

The function for executive directors who don’t hold another more specific function. It’s often confused with SMF18, so read SMF3 or SMF18? Getting the designation right before recruiting, and our full SMF3 guide. When you are adding an executive to the board, see executive director (SMF3) recruitment and our board appointment checklist.

SMF24 Chief Operations

Responsible for the firm’s internal operations and technology, including operational resilience and outsourcing. See the SMF24 guide and COO recruitment.

SMF6 and SMF7

PRA functions at dual-regulated firms: the Head of Key Business Area for very large business areas, and the Group Entity Senior Manager for group-level individuals who exercise significant influence over the firm. See the SMF6 guide, the SMF7 guide and our article on group SMF roles.

SMF8 Credit Union Senior Manager

A PRA function for smaller credit unions, covering the person responsible for managing the credit union’s affairs where the full set of executive functions does not apply. See the SMF8 guide.

Control Functions

SMF4 Chief Risk

Responsible for overseeing the firm’s risk management and giving the board an independent view of its risks. See the SMF4 guide and chief risk officer recruitment.

SMF5 Head of Internal Audit

Responsible for the internal audit function, which must be independent of the areas it reviews. See the SMF5 guide and Head of Internal Audit recruitment.

SMF16 Compliance Oversight

The most frequently recruited Senior Manager Function, accountable for overseeing compliance with the FCA’s rules. See the SMF16 and SMF17 guide, compliance officer recruitment and who can be your MLRO or compliance officer. Smaller firms often appoint a part-time compliance officer, and firms covering a vacancy can use an interim compliance officer or MLRO.

SMF17 Money Laundering Reporting Officer

Accountable for the firm’s anti-money laundering systems and controls, and usually the nominated officer for suspicious activity reporting. See the MLRO guide, MLRO recruitment and, for the team around the MLRO, financial crime leadership recruitment. For smaller firms, see fractional MLRO recruitment, and for building the team, do you need a deputy MLRO?

SMF16 and SMF17 Held Together

Many smaller firms appoint one person as both compliance officer and MLRO. It works where the firm’s risks are moderate and the person has real depth in both disciplines. See combined compliance officer and MLRO recruitment, what a combined role costs and when to split the role as the firm grows.

Board and Non-Executive Functions

SMF9 Chair

Leads the board and is central to the firm’s governance and culture. See the SMF9 guide and chair recruitment.

SMF10, SMF11, SMF12 and SMF13 Committee Chairs

The chairs of the risk, audit, remuneration and nomination committees, each accountable for the effectiveness of their committee. See the SMF10 and SMF11 guide the SMF12 guide and the SMF13 nomination committee chair guide.

SMF14 Senior Independent Director

A sounding board for the chair and an alternative route for concerns. See the SMF14 guide.

Not every non-executive role is a Senior Manager Function. Our page on non-executive directors at FCA-regulated firms explains which roles need approval.

Other and Specialist Functions

SMF18 Other Overall Responsibility

The catch-all for individuals with overall responsibility for an area not covered by another function, most relevant at Enhanced firms. See the SMF18 guide and SMF18 recruitment.

SMF19 and SMF22: UK Branches

The Head of Third Country Branch and Other Local Responsibility functions give the regulators accountable individuals at UK branches of overseas firms. See the SMF19 guide, the SMF22 guide, branch head recruitment, SMF approval for overseas firms and our current SMF19 role.

SMF20 and SMF23: Insurance

The Chief Actuary and Chief Underwriting Officer functions apply at insurers and Lloyd’s managing agents. See the SMF20 Chief Actuary guide, the SMF23 Chief Underwriting Officer guide and our insurance sector page.

SMF27 Partner

Applies to partners at regulated partnerships and LLPs, common in wealth management. See the SMF27 guide and RDR-qualified Senior Managers.

SMF29 Limited Scope Function

Applies at Limited Scope firms, where the regime is pared back. See the SMF29 guide and which SMFs apply at which firm tier.

Choosing the Right Designation

• Start from the responsibilities, not the job title. Draft the Statement of Responsibilities first, using our free template.
• Check your tier. Some functions apply only at Enhanced or dual-regulated firms. If you’re approaching Enhanced, see becoming an Enhanced firm.
• Consider combinations. One person can hold several functions, but some combinations are questioned. See combining Senior Manager roles.
• Map the whole firm. At Enhanced firms, every area needs a Senior Manager with overall responsibility. Our Responsibilities Map template helps find gaps.
• Plan the timing. See SMF timing and eligibility and how long an SMF appointment takes.

Recruiting for a Designation

Every SMF Capital search starts from the designation and the Statement of Responsibilities the new Senior Manager will hold. We test every candidate against the fit and proper test before introduction, start regulatory references early and plan the search around the approval timetable. If a Senior Manager has just left, see urgent SMF replacement. For board, executive and hard-to-fill roles we run retained executive searches, and our case studies show recent appointments. For pay benchmarks across every designation, see our SMF and compliance salary guide, and for current demand by function, our SMF recruitment market update.

Frequently Asked Questions

How many Senior Manager Functions are there?

Around two dozen across the FCA and PRA, though most firms need only a handful. Which apply depends on the firm’s tier and structure.

Which SMFs does a Core firm need?

Typically the Chief Executive, Executive Directors, Chair, Compliance Oversight and MLRO, plus Partner at partnerships, where the firm has those roles. See SMFs by firm tier.

Who designates each function?

The FCA designates most functions. At dual-regulated firms, several are designated by the PRA instead, and some are PRA-only.

Can one person hold more than one SMF?

Yes, with approval for each, if they have the time and expertise and the combination doesn’t undermine challenge. See combining Senior Manager roles.

Which designation should a business head hold?

Often SMF3 if they’re an executive director, or SMF18 if they have overall responsibility for an area without another function. See SMF3 or SMF18?.