An “Approved Person” is an individual who is directly approved by the FCA to perform one or more activities on behalf of an authorised firm. They are approved under the Senior Manager and Certification Regime (SM&CR).
The majority of controlled functions have automatically been converted to Senior Manager Functions (SMF) by the FCA, but it is the firm’s responsibility to ensure the individuals hold the correct SMF. See function mapping table below.
Firms with a Limited Permission – for example, motor dealers who are not directly authorised for general insurance – will normally only require one Approved Person.
When considering a candidate for approval under SM&CR, the firm must satisfy itself that a person is Fit and Proper (FIT) before applying for them to be approved as an SMF. The FCA will look at the individual’s:
- Honesty
- Integrity and reputation
- Competence and capability
- Financial soundness
Individuals can hold more than one SMF function and be an Approved Person for more than one firm so long as they are satisfied the person is FIT to undertake the role.
Function mapping for Core and Limited Scope firms (including branches)
| Previous Controlled Function | Corresponding Senior Management Function(s) | ||
|---|---|---|---|
| CF1 – Director | SMF3 – Executive Director | ||
| CF2 – Non-Executive Director | SMF9 – Chair | ||
| CF3 – Chief Executive |
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| CF4 – Partner |
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| CF5 – Unincorporated Association | SMF3 – Executive Director | ||
| CF6 – Small Friendly Society Function | SMF3 – Executive Director | ||
| CF8 – Apportionment & oversight | SMF29 – Limited Scope | ||
| CF10 – Compliance & Oversight | SMF16 – Compliance Oversight | ||
| CF11 – Money Laundering Reporting Officer (MLRO) | SMF17 – Money Laundering Reporting Officer (MLRO) | ||
| CF29 – Significant Management Function | SMF21 – EEA Branch Senior Management Function |
Senior Managers are required to comply with the FCA’s conduct rules under SM&CR