Can One Person Hold More Than One SMF? Combining Senior Manager Roles

At a smaller regulated firm, the question comes up almost immediately: does every Senior Management Function need its own person, or can one individual hold several? The answer is that combining functions is both common and legitimate — but it is not unlimited, and getting the structure right matters for how the firm is governed and how the regulator views it. This article sets out when one person can hold multiple SMFs, where the limits lie, and how smaller firms should think about structuring their senior manager appointments.

It is written for founders, boards and compliance leads at authorised firms deciding how to allocate the functions — particularly at the smaller end, where resource is finite and the temptation to concentrate functions is strong. It reflects the position under the Senior Managers and Certification Regime as it stands in November 2026, including the Phase 1 changes that took effect in April and the Phase 2 proposals the FCA and PRA published in October. Where a specialist search is the right route, Exec Capital runs executive director recruitment for FCA-regulated firms and searches across the other Senior Management Functions, including combined and fractional appointments.

The Starting Point: Combining Is Allowed

There is no general rule that each Senior Management Function must be held by a different individual. At many smaller firms, a single person holds several functions — a chief executive who also sits on the board, a compliance professional who holds both compliance oversight and the MLRO function, a finance leader who is both the chief finance function and a board director. The framework is designed to be proportionate: a small firm is not expected to appoint a dozen separate senior managers it does not need and cannot justify.

The PRA states the position directly for the firms it regulates. Chapter 8 of the Senior Management Functions Part of the PRA Rulebook provides that, except as otherwise set out in that chapter, a person may perform more than one PRA senior management function on behalf of a firm. The FCA regime works on the same footing: functions attach to the firm’s needs, and one approved individual can be approved for more than one of them where that makes sense.

What the firm must do is allocate every function that applies to it to a named, approved individual, and be able to show that each holder can genuinely discharge what they hold. Each function needs its own approval. If an existing senior manager is to take on an additional function, the firm has to apply for approval for that function as well; holding one SMF does not carry approval for another. The individual’s Statement of Responsibilities then needs to describe everything they are accountable for across all the functions they hold, so that the regulator can see the whole of their remit in one place.

Which functions apply depends on the firm’s classification. A core solo-regulated firm will typically need fewer SMFs than an enhanced firm, and dual-regulated banks and insurers have a wider set again, split between the FCA and PRA. Our SMF roles guide sets out the functions and who they apply to, and it is worth starting there before deciding what can sit together.

Common and Legitimate Combinations

Compliance oversight and MLRO

The most frequent combination is SMF16 (compliance oversight) and SMF17 (money laundering reporting), held by one compliance professional. At a small broker, boutique asset manager or directly authorised adviser, this is often the right and proportionate structure: the volume of regulatory and financial-crime work does not justify two senior people, and one experienced individual can own both. Our guide to SMF16 vs SMF17 and when to combine them sets out the considerations in detail, and Exec Capital runs combined SMF16/SMF17 searches for exactly this.

The combination works best where the firm’s financial-crime exposure is modest and well understood. Where the business handles high volumes of transactions, onboards customers in higher-risk jurisdictions or operates in payments, e-money or cryptoassets, the MLRO workload can grow quickly enough that one person holding both functions struggles to keep up.

A board executive holding a functional SMF

A finance director who sits on the board may hold the chief finance function (SMF2) as well as their board role; a chief executive holds the chief executive function (SMF1) and the board seat that goes with it. Depending on the firm and the functions involved, a board-level executive may also need to hold the executive director function (SMF3), and firms should check the applicable rules for their own position. These overlaps are normal: the functions capture different dimensions of the same person’s accountability, and the Statement of Responsibilities records both.

At smaller firms it is also common for the chief executive or another executive director to pick up prescribed responsibilities that a larger firm would spread across several people. That is legitimate, but it adds to what the individual must be able to evidence they are on top of.

Governing and required functions at a small firm

At the smallest authorised firms, a very small number of individuals may hold all the applicable functions between them. Provided each person can genuinely discharge what they hold and the allocation is clear, this is a legitimate and proportionate structure — indeed, the regime is designed to accommodate it. Firms going through authorisation for the first time face this question early; the allocation of functions is one of the things the regulator looks at closely, so it pays to settle the structure before the application goes in.

Where the Limits Lie

Hard restrictions: Chair and Chief Executive

There are a small number of express prohibitions. The clearest is in the PRA Rulebook: a firm must ensure that the person performing the Chair of the Governing Body function (SMF9) does not at the same time perform the Chief Executive function (SMF1) within the same firm. The rule sits in Chapter 8 of the Senior Management Functions Part of the PRA Rulebook, and it reflects the principle that the person leading the board should be separate from the person running the business. For listed companies, the UK Corporate Governance Code points the same way. Even where no rule applies, combining chair and chief executive at a regulated firm is likely to draw questions about how the board challenges the executive.

Capacity: can the individual actually do it?

The first practical limit is capacity. A person holding several functions must have the time and capacity to discharge each of them properly. The regulator is entitled to ask whether an individual stretched across too many functions can genuinely own them all. Concentrating functions to save cost, where the holder cannot realistically discharge them, is a false economy and a regulatory risk. The question becomes sharper where the person is part-time or holds roles at other firms, because the firm must be able to show the time commitment is real.

Conflicts: do the functions pull against each other?

The second limit is conflict. Some functions are meant to be independent of others, and combining them undermines that independence. The clearest example is the chief risk function (SMF4), which exists to provide independent second-line challenge to the business — combining it with a first-line business role defeats the purpose. For PRA-regulated firms, the Risk Control Part of the PRA Rulebook requires the head of the risk management function to be an independent senior manager with distinct responsibility for that function; only where the firm’s nature, scale and complexity do not justify a specially appointed person may another senior person fulfil it, and then only where there is no conflict of interest. Internal audit (SMF5 where it applies), as the third line, is similarly meant to be independent of the activities it audits. The firm needs to think about which functions can sit together without compromising the oversight the regime is built on.

Compliance raises a similar, if less absolute, point. A compliance officer who also runs a revenue-generating business line is marking their own homework. At a very small firm some overlap may be unavoidable, but the firm should recognise the conflict, record how it is managed and be ready to explain it.

Proportionality cuts both ways

As a firm grows, combinations that were proportionate at the start stop being so. A single compliance professional holding both compliance oversight and the MLRO function may be right for a small firm but wrong once the firm’s scale and risk profile grow. A firm that crosses into enhanced status, adds new permissions or moves into higher-risk activity should expect the regulator to look again at whether concentrated functions still fit. Reviewing the allocation as the firm changes is part of good governance.

How the 2026 Reforms Affect Combined Roles

The SM&CR is in the middle of a two-stage reform. Phase 1 is in force: the FCA’s PS26/6 and the PRA’s parallel policy statement made targeted changes, most of which took effect on 24 April 2026. They covered areas such as the 12-week rule for temporary cover, Statements of Responsibilities, prescribed responsibilities and the threshold for enhanced firms. None of them changes the basic position that one individual can hold more than one SMF, or the Chair and Chief Executive restriction.

Phase 2 is at proposal stage. On 22 October 2026 the FCA published CP26/37 and the PRA published CP14/26, both consulting until 22 January 2027. These are proposals, not final rules, and much of what they describe depends on changes to primary legislation going through Parliament. Among other things, the FCA proposes to reduce the number of SMF applications by removing certain SMFs and making other roles notifiable rather than pre-approved, to remove the Certification Regime and to stop requiring ongoing submission of Statements of Responsibilities. The PRA proposes moving a number of its SMFs from pre-approval to notification while keeping pre-approval for roles such as Chief Executive, Chief Finance, Chief Risk and Chair, and extending the temporary cover period from 12 to 18 weeks.

If the proposals go ahead in that form, some combinations may become simpler to put in place administratively, because adding a notifiable function would not need a full approval application. They would not remove the underlying tests. The firm would still need to allocate responsibilities clearly, satisfy itself that the individual is fit and proper, and show that one person has the capacity and independence to hold what they hold. Firms planning a structure now should work to the current rules and treat the Phase 2 changes as possible, not settled.

How to Think About Structuring the Appointments

The practical approach is to start from the functions that apply to the firm, decide which can legitimately be combined given capacity and conflicts, and then recruit to that structure — rather than starting from the people available and retrofitting functions onto them. For a small firm, that frequently means a small number of senior managers holding sensible combinations, often with a fractional or part-time arrangement for a function that does not justify a full-time hire.

• Identify every Senior Management Function that applies to the firm given its classification and permissions;
• Check the express restrictions first — in particular, Chair and Chief Executive held separately at PRA-regulated firms;
• Decide which functions can legitimately be combined, given each holder’s capacity and any conflicts;
• Keep the independent oversight functions — risk, internal audit — genuinely independent of the business;
• Recruit approvable, fit-and-proper individuals to that structure, full-time or fractional as the role justifies;
• Review the allocation as the firm grows, and split combined roles before capacity or conflict becomes a problem.

Where a function does not justify a full-time hire, a fractional or part-time holder can discharge it, provided the arrangement is genuine and the time commitment is documented. Where a function falls vacant and must be covered at short notice, Exec Capital’s urgent SMF appointment service helps the firm put cover in place while a permanent appointment is made. Temporary cover under the 12-week rule is a common way for an existing senior manager to pick up a vacant function for a short period, but it is a stop-gap rather than a structure, and the firm should plan the permanent arrangement from the start.

A further point that is easy to overlook is key-person risk. When one individual holds several functions, their departure leaves several gaps at once. The firm should have a realistic plan for how each function would be covered, and the board should be aware of how concentrated its senior management has become.

What Combining Functions Means for Recruitment

Deciding to combine functions changes the brief. A combined SMF16/SMF17 role is not simply a compliance job with an AML element bolted on; it asks for a professional who can genuinely own both the firm’s compliance with the regulatory system and its financial-crime framework, and who has the capacity to carry both. A board executive holding a functional SMF alongside a directorship needs the standing to discharge both the governance and the executive accountability. Writing the brief around the combination — rather than around a single title — is what produces a shortlist of people who can actually hold what the firm needs them to hold.

It also changes assessment. Where one individual will hold several functions, the firm has to be confident that each one is genuinely covered — that the holder is not strong on one dimension and thin on another. An assessment that tests only the headline role risks putting forward someone who cannot discharge the combined accountability, and the approval application has to stand up for every function. Exec Capital assesses combined-role candidates against each function they will hold, and the shortlist commentary speaks to fitness and propriety for the whole of what they are taking on.

It changes the candidate pool, too. Fewer people have held a given combination before, and those who have are often in demand. A firm looking for one person to cover finance, a board seat and a functional SMF is looking at a narrower market than one recruiting a finance director alone, and the search has to reach beyond active job-seekers. That is where a specialist executive director search adds most: identifying people with the right combination of experience and the regulatory record to be approved for all of it.

Finally, the offer has to reflect the remit. A person taking on two or three senior management functions carries personal regulatory accountability for each. Remuneration, time commitment, support and the scope of the role should be agreed with that in mind, or the strongest candidates will decline.

Frequently Asked Questions

Is there a maximum number of SMFs one person can hold?

There is no fixed numerical limit. The constraint is practical and conflict-based: the individual must have the capacity to discharge each function properly, and the combination must not undermine the independence the regime relies on. A firm concentrating functions in one person should be able to justify that the holder can genuinely own them all.

Can the compliance officer also be the MLRO?

Yes — holding both the compliance oversight (SMF16) and money laundering reporting (SMF17) functions is one of the most common combinations at smaller firms, provided the individual has the capacity and expertise to discharge both and no conflict arises. As the firm grows, the functions are often split.

Which functions should never be combined?

At PRA-regulated firms, the Chair of the Governing Body (SMF9) must not also perform the Chief Executive function (SMF1) in the same firm. Beyond that, functions that exist to provide independent oversight of the business — the chief risk function and internal audit — should not be combined with first-line business roles, because doing so removes the independence that is the point of those functions.

Does each additional function need its own approval?

Under the current rules, yes. An existing senior manager taking on another SMF needs approval for that function too. The October 2026 consultations propose moving some functions to notification rather than pre-approval, but those are proposals and the current requirements still apply.

Can a fractional or part-time person hold more than one SMF?

Yes, provided the time commitment is genuinely enough to discharge every function they hold. The firm should document the arrangement and be ready to explain to the regulator how the individual covers each function.

Sources and Further Reading

• FCA — Senior Managers and Certification Regime
• FCA — PS26/6: SM&CR review (Phase 1)
• FCA — CP26/37: SM&CR review, Phase 2 (consultation)
• PRA — CP14/26: SM&CR review, Phase 2 (consultation)
• PRA Rulebook — Senior Management Functions