How we assess senior management function applications

Once we receive your complete application[1], a case officer will assess it according to the criteria below.

We will only approve an application once the firm has demonstrated, and we are satisfied that the candidate is fit and proper[2] to perform the SMF role in question.

(The same applies to giving our consent for dual-regulated applications where the Prudential Regulation Authority (PRA) is the lead regulator.) 

This page covers:

• Scrutiny levels – our risk-based approach.
• Applications from candidates from overseas or other industry sectors.
• Timelines – how long assessments take.
• Interviews – what to expect.
• Outcomes – next steps if your application is approved, refused or approved with conditions
• How to withdraw an application.

Our risk-based approach  

We apply a risk-based approach to assessing SMF applications. This helps to ensure we assess candidates in a measured and proportionate way.

Many factors influence our assessment. For example, we may apply a different level of scrutiny when assessing whether a candidate is competent for the role of executive director in a large complex firm, compared to an executive director role in a smaller firm operating in a different market, or a firm where we have concerns around the firm’s governance arrangements.

The level of scrutiny we apply to reach a decision will be based on several factors, including the:

• Candidate's background and regulatory history.
• Role being applied for.
• Applicant firm’s size, background and regulatory history.
• Risks of harm posed by firms in the relevant market(s).

We evaluate each application on its own merits and circumstances, in terms of the candidate’s fitness and propriety. If necessary, we will also liaise closely with our supervisory colleagues.

We expect all firms to be honest and open throughout the assessment. We want to be confident that individuals in key roles at firms are not only competent and trustworthy now, but also likely to remain so in the future.

Candidates from overseas or other industry sectors

How long assessments take

We must decide on an application within 3 months of receiving it.  

Your application could take longer if we need to:

• Ask for more information.
• Interview the candidate.

If we do, we may stop the clock (pause processing the application) until we receive the information, or the interview has taken place.  

Your assigned case officer can update you on progress.

We only provide progress reports to your firm, not to candidates.  

See our latest timescales for processing applications[9]

Interviews for senior management functions

We may invite candidates for an interview for several reasons, such as:  

• Concerns about a candidate's fitness and propriety.
• Questions around how the candidate will address challenges at the applicant firm.  
• Other matters, such as the potential impact of the role, due to the size of the firm or the nature of its business.

The candidate will be interviewed by a relevant panel (which is likely to include representatives from our authorisations and supervisory teams). We will try to keep the panel as small as possible.

Let us know if your candidate needs any reasonable adjustments before the interview for accessibility purposes.

Interviews can take place:  

• At the FCA offices.
• At the PRA offices (if the application is for a dual-regulated firm).
• Remotely.

What to expect at interview

We will tell you in advance what areas we wish to explore at the interview.

We expect candidates to understand:

• Their regulatory responsibilities.
• Their role.
• How their knowledge or experience equips them to carry out their duties and meet our expectations.

We may explore their understanding of other areas, for example:

• The market in which the firm operates.
• The firm’s business model and strategy.
• Risk management and control.
• Financial analysis and controls (for solo-regulated firms).
• Governance, oversight and controls.
• Our regulatory framework, requirements and expectations.
• The culture of the firm, including its approach to diversity and inclusion.
• The firm’s implementation of regimes such as our Consumer Duty.

After the interview

We will consider information from the interview alongside that already gathered in the assessment and tell the firm what the outcome is.

In some cases, we may invite the candidate back for another interview. This may be because the panel wants:

• To discuss outstanding matters further before making a decision.
• A second, independent view from a new panel.

For dual-regulated firms, either regulator or both may decide to interview the candidate.  

If both the FCA and the PRA decide to interview, the interview will be conducted jointly.

The PRA will contact you for PRA-led interviews.

Outcomes

There are 3 possible outcomes for an application.

1. approval
2. conditional and/or time-limited approval
3. refusal

Withdraw an application

Your firm has the right to withdraw the application at any time before we make a decision.  

Submit Form B via Connect[14] to withdraw your application to perform a controlled function.

Both the firm and candidate need to consent to the withdrawal.  

If the candidate wants us to continue the assessment, we can do this without the support of the firm. If we continue the application and decide favourably on the candidate’s fitness and propriety, this finding will only relate to the role applied for by the original firm that has withdrawn its support.

If we refuse the application, we will:

• Issue statutory notices to both the firm and candidate, setting out the reasons for the refusal.
• Publish a record of the decision.

Read more about Form B[15]