Sheet 1: Table of contents

	
	

		
The following inventory/table summarises a number of instances where the PRA has called on/asked firms through supervisory statements or other documents to assign responsibility for managing particular risk issues to one or more Senior Management Function holders (or other senior personnel). The inventory does not supersede existing supervisory statements or other documents, and firms should continue to consult the original publications where relevant. The inventory does not summarise the responsibilities inherent in particular Senior Management Functions (e.g. Chief Executive, SMF1; Head Finance, SMF2) nor the prescribed responsibilities under the Senior Managers Regime; and firms should consult the PRA Rulebook regarding these requirements.          

Under each tab, the list is in chronological recent, with most recent publications (based on their original publication date) first.
	
	

		
Table of Contents:
	
	

		
Requirements
	
	

		
Expectations
	
	

		
Other communications
	
	

		


	
	

		
Last updated: 13/12/2021
	



Sheet 2: Requirements

	
	
	

		
Prescribed Responsibilities
		


	
	

		


		


	
	

		
Application
		
Section of the PRA Rulebook
	
	

		
CRR Firms
		
CRR Firms: Allocation of Responsibilities 4-6
	
	

		
Non-CRR Firms
		
Non-CRR Firms: Allocation of Responsibilities 4-6
	
	

		
Solvency II Firms
		
Solvency II Firms: Insurance – Allocation of Responsibilities 3-3B
	
	

		
Non-Solvency II Firms
		
Non-Solvency II Firms: Non-Solvency II Firms – Allocation of Responsibilities 3
Non-Solvency II Firms: Large Non-Solvency II Firms – Allocation of Responsibilities 3-3A
	



Sheet 3: Expectations

	
	
	
	
	
	
	

		
Publication / Topic
		
Identified SMF
		
Expectation or action
		
Notes
		
Link
		
Date of first publication
	
	

		
SS5/21 - International banks: The PRA’s approach to branch and subsidiary supervision
		
Unspecified
		
Accountability of Senior Management Functions (SMFs)
4.23 Where applicable, the PRA expects firms to allocate the responsibility for overseeing the firm’s booking arrangements to an SMF, and to record this appropriately in their SoR.
		


		
https://www.bankofengland.co.uk/prudential-regulation/publication/2021/july/pra-approach-to-branch-and-subsidiary-supervision-ss
		
Jul-21
	
	

		
SS3/21 - Non-systemic UK banks: The Prudential Regulation Authority’s approach to new and growing banks
		
Unspecified
		
Capital Management
4.13 Banks should manage their capital position on a forward looking basis and, as outlined in SS31/15, should not use their PRA buffer in the normal course of business or enter into it as part of their base business plan. Where capital injections are needed, these should take place sufficiently in advance to avoid entering buffers. Responsibilities for the management of the bank’s capital position should be clearly defined in accordance with the Senior Managers Regime.
		


		
https://www.bankofengland.co.uk/prudential-regulation/publication/2021/april/new-and-growing-banks-ss
		
Apr-21
	
	

		
SS2/21 - Outsourcing and third party risk management
		
Preferably SMF24
		
Outsourcing and the SM&CR
4.7 Allocation of Responsibilities 4.1(21) (banks) and Insurance – Allocation of Responsibilities 3.1(A3)(12) (insurers) require firms to allocate a Prescribed Responsibility for a firm’s regulatory obligations in relation to outsourcing to an SMF. 
4.8 The PRA generally expects but does not require this Prescribed Responsibility to be allocated to (one of) the individuals performing the Chief Operations Senior Management Function (SMF24) if a firm has one or more individuals performing that SMF. As noted in SS28/15 for banks and SS35/15 for insurers, the SMF24 can be split among more than one individual in certain circumstances. SMF24s may also be responsible for other areas or activities relevant to the expectations in this SS, such as the firm’s information security policy.
4.9 Firms should interpret this Prescribed Responsibility as encompassing the firm’s overall framework, policy, and systems and controls relating to outsourcing. Responsibility for individual outsourcing arrangements may still lie with relevant business lines or other areas of the firm. The free text section of the relevant SMF’s Statement of Responsibilities should describe this responsibility in an appropriate level of detail, in line with SS28/15.
		
Effective from 31 March 2022.
		
https://www.bankofengland.co.uk/prudential-regulation/publication/2021/march/outsourcing-and-third-party-risk-management-ss
		
Mar-21
	
	

		
SS1/21 - Operational resilience: Impact tolerances for important business services
		
Preferably SMF24
		
Management responsibilities
7.3 Firms should establish clear accountability and responsibility for the management of operational resilience, including implementation of the policy set out here. The PRA expects firms to structure their oversight of operational resilience in the most effective way for their business, using existing committees and roles or establishing new ones if necessary. 
7.4 Where it exists, the Chief Operations Senior Management Function (SMF) 24 should hold overall responsibility for implementing operational resilience policies and reporting to the board. Consistent with paragraph 2.11G of SS28/15 ‘Strengthening individual accountability in banking’ and paragraph 2.22L of SS35/15 ‘Strengthening individual accountability in insurance’, the SMF24 function may be shared or split among two or more individuals. This is on the basis that the split accurately reflects the firm’s organisational structure and that comprehensive responsibility for operations and technology is not undermined. However, firms that have a single senior individual with overall responsibility for internal operations and technology should only have that individual approved as the SMF24. Where the SMF24 function is split, the PRA does not expect it to be split among more than three individuals. Further information on the SMF24 function is contained in the 
aforementioned Supervisory Statements.
7.5 Where a firm does not have a board, senior management should take responsibility for the Operational Resilience Parts.
		
Effective from 31 March 2022.
		
https://www.bankofengland.co.uk/prudential-regulation/publication/2021/march/operational-resilience-impact-tolerances-for-important-business-services-ss
		
Mar-21
	
	

		
SS1/20 - Prudent person principle
		
SMF4
		
Introduction
1.7 The PRA also reminds firms:
- of the responsibilities resting with Senior Management Functions under the Senior Managers and Certification Regime. Specifically, the Chief Risk Officer is responsible for managing and reporting to the board on the risk management strategies and processes in place, including those relating to investments.
		


		
https://www.bankofengland.co.uk/prudential-regulation/publication/2020/solvency-ii-prudent-person-principle-ss
		
May-20
	
	

		
SS4/19 - Resolution assessment and public disclosure by firms
		
Unspecified
		
Barriers to Resolvability
2.14 The PRA expects a firm to undertake testing of its preparations for resolution to substantiate its assessment, to identify any risks to its resolution, and to assist in the development of steps it needs to take to remove or reduce those risks. Any testing and review should assess a firm’s capabilities, resources and arrangements against the objectives outlined above in paragraph 2.11 should be designed with regard to the stylised resolution timeline as outlined in Annexes 1 and 2 the Bank’s Approach to Assessing Resolvability SoP. 
2.15 A firm should undertake testing and review of its preparations at a suitable frequency to ensure that its assessment remains up-to-date and accurate.
2.16 A firm should appropriately allocate roles and responsibilities for its testing. The PRA expects any testing to involve an appropriate level of senior management engagement, to provide oversight and to reflect how the firm’s preparations function in practice. Reviews should be carried out by individuals of a suitable level of expertise and a suitable level of independence to ensure the review is robust.
		


		
https://www.bankofengland.co.uk/prudential-regulation/publication/2019/resolution-assessment-and-public-disclosure-by-firms-ss
		
Jul-19
	
	

		
SS3/19 - Enhancing banks and insurers approaches to managing the financial risks from climate change
		
Unspecified
		
Governance
3.4 The PRA expects firms to have clear roles and responsibilities for the board and its relevant sub-committees in managing the financial risks from climate change. In particular, the board and the highest level of executive management should identify and allocate responsibility for identifying and managing financial risks from climate change to the relevant existing Senior Management Function(s) (SMF(s)) most appropriate within the firm’s organisational structure and risk profile, and ensure that these responsibilities are included in the SMF(s)’s Statement of Responsibilities. The PRA expects to see evidence that the board and its relevant 
sub-committees exercise effective oversight of risk management and controls. Further, the PRA expects the board to ensure that adequate resources and sufficient skills and expertise are devoted to managing the financial risks from climate change.
		


		
https://www.bankofengland.co.uk/prudential-regulation/publication/2019/enhancing-banks-and-insurers-approaches-to-managing-the-financial-risks-from-climate-change-ss
		
Apr-19
	
	

		
SS10/18 - Securitisation: General requirements and capital framework
		
SMF(s) and employees subject to the Certification Regime involved in investment decisions in securitisation exposures
		
Governance arrangements, processes and mechanisms 
2.5 The PRA expects that relevant individuals performing Senior Management Functions (SMFs), such as the individual to whom Prescribed Responsibility (PR) 7 has been allocated, exercise effective oversight of securitisation issuance, including with regard to the requirements in Article 6(2) on Firms’ use of the CRR hierarchy adverse selection. Where appropriate, the PRA expects SMFs to escalate issues related to oversight of securitisation issuance to the board or a relevant sub-committee.
2.5A Where a CRR firm acts as an originator, original lender, and/or sponsor in a non-performing exposure (NPE) securitisation subject to the requirements of the Securitisation Regulation, the PRA expects that the firm’s SMF 16 (Compliance Oversight) should satisfy themselves that performing exposures are not being included in an NPE securitisation with the purpose of reducing the capital charge on such performing exposures in the underlying relative to the 100% risk weight on the senior exposure of qualifying NPE securitisation.
Firms’ use of the CRR hierarchy
4.18 Relevant senior management should ensure that firms are using appropriate methods to capitalise their securitisation exposures.
4.19 For these purposes, relevant senior management means the individual(s) performing the relevant SMF(s), and employees subject to the Certification Regime involved in investment decisions in securitisation exposures (eg relevant Material Risk Takers (MRTs) under the Remuneration rules).
		
Effective from 1 January 2022.
		
https://www.bankofengland.co.uk/prudential-regulation/publication/2018/securitisation-general-requirements-and-capital-framework-ss
		
Nov-18
	
	

		
SS5/18 - Algorithmic trading
		
Unspecified
		
The management body
2.5 The management body should identify the relevant Senior Management Function(s) (SMF(s)) with responsibility for algorithmic trading and ensure that this is included in the SMF’s Statement of Responsibility.
		


		
https://www.bankofengland.co.uk/prudential-regulation/publication/2018/algorithmic-trading-ss
		
Jun-18
	
	

		
SS8/16 - Ring-fenced bodies (RFBs)
		
Unspecified
		
Annual Senior Management Function attestation of the inclusion of intragroup over the-counter (OTC) derivative transactions into the scope of the own funds requirements for Credit Valuation Adjustment (CVA) risk
11.4 The PRA expects that an appropriate individual performing a Senior Management Function in the RFB provides to the PRA, on an annual basis, written attestation that for the purposes of calculating the own funds requirement for CVA risk:
- on an individual basis, the RFB has included intragroup OTC derivative transactions undertaken with group members that are outside of the RFB sub-group; and
- on a sub-consolidated basis, the RFB has included intragroup OTC derivative transactions undertaken by all PRA-regulated entities within the RFB sub-group that are required by the CRR to calculate own funds requirements for CVA risk with group members outside of the RFB sub-group.
11.5 Similarly, the PRA also expects that each PRA-regulated entity within the RFB sub-group that is required to calculate own funds requirements for CVA risk on an individual basis should ensure that an appropriate individual performing a Senior Management Function provides to the PRA, on an annual basis, written attestation that the firm has included intragroup OTC derivative transactions undertaken with group members outside of the RFB sub-group.
11.6 In all of the cases above, the PRA expects this additional responsibility to be expressly reflected in the Statement of Responsibilities of the relevant appropriate individual performing a Senior Management Function.
		


		
https://www.bankofengland.co.uk/prudential-regulation/publication/2016/ring-fenced-bodies-ss
		
Jul-16
	
	

		
SS39/15 - Whistleblowing in deposit-takers, PRA-designated investment firms and insurers
		
Unspecified
		
Whistleblowers’ champion
4.1 Firms subject to the Senior Managers Regime must allocate a ’prescribed responsibility’ relating to the oversight of whistleblowing policies to a Senior Manager. For the purposes of this supervisory statement, this individual will be known as the whistleblowers’ champion.
4.2 As part of discharging the requirements of their prescribed responsibility, the PRA expects the whistleblowers’ champion to ensure that an annual report is presented to the board, regarding the effectiveness of whistleblowing systems and controls. This report should include details of any employment tribunals involving whistleblowers which the firm has lost. The firm has discretion as to the exact content of the report. It should be made available to the PRA on request.
4.3 The whistleblowers’ champion should be responsible for ensuring and overseeing the integrity, independence and effectiveness of the firm’s policies and procedures on whistleblowing, including those policies and procedures intended to protect whistleblowers from being victimised because they have disclosed reportable concerns. 
4.4 The PRA expects firms to ensure that the whistleblowers’ champion has a level of authority within the firm and access to resources and information sufficient to carry out that function. Having access to resources includes having recourse to independent legal advice and dedicated training.
		


		
https://www.bankofengland.co.uk/prudential-regulation/publication/2015/whistleblowing-in-deposit-takers-pra-designated-investment-firms-and-insurers-ss
		
Oct-15
	
	

		
SS31/15 - The Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP)
		


		
Group risk
2.16AH Under the Senior Managers Regime (SMR), firms are required to allocate a Prescribed Responsibility (PR) for managing the allocation and maintenance of the firm’s capital, funding and liquidity to an individual performing a Senior Management Function (SMF). The PRA expects:
- the SMF allocated this PR to ensure that the firm conducts the assessments specified in paragraphs 2.16AA to 2.16AG, and to document them in the firm’s ICAAP submissions, and
- firms to ensure this expectation is explicitly reflected in the relevant SMF’s Statement of Responsibilities.
		
See the Supervisory Statement for detail on paragraphs 2.16AA to 2.16AG.
		
https://www.bankofengland.co.uk/prudential-regulation/publication/2013/the-internal-capital-adequacy-assessment-process-and-supervisory-review-ss
		
Jul-15
	
	

		
SS24/15 - The PRA’s approach to supervising liquidity and funding risks
		
SMF with the responsibility for managing the allocation and maintenance of the firm’s capital, funding and liquidity
		
Transferability of funds
2.35AA Under the Senior Managers Regime (SMR), firms are required to allocate a Prescribed Responsibility (PR) for managing the allocation and maintenance of the firm’s capital, funding and liquidity to an individual performing a Senior Management Function (SMF). The PRA expects: 
- the SMF allocated this PR to ensure that the firm conducts the assessment specified in paragraph 2.35, and to document it in the firm’s ILAAP submissions; and 
- firms to ensure this expectation is explicitly reflected in the relevant SMF’s Statement of Responsibilities. 
		
This version is applicable from 1 January 2022.
Clarification on what is expected of the SMF with the responsibility for managing the allocation and maintenance of the firm’s capital, funding and liquidity.
See the Supervisory Statement for detail on paragraph 2.35.
		
https://www.bankofengland.co.uk/prudential-regulation/publication/2015/the-pras-approach-to-supervising-liquidity-and-funding-risks-ss
		
Jun-15
	
	

		
SS23/15 - Solvency II: supervisory approval for the volatility adjustment
		
SMF responsible for the ORSA
		
Content of the application
2.4 Applications should include the following information, required under the Solvency II Directive (‘the Directive’): 
- a cover letter stating that the application is endorsed by the senior manager who is responsible for the ORSA that is presented to the firm’s governing body, and explaining how the conditions set out in Regulation 43(4) of the Statutory Instrument are met.
		


		
https://www.bankofengland.co.uk/prudential-regulation/publication/2015/solvency2-supervisory-approval-for-the-volatility-adjustment-ss
		
Jun-15
	
	

		
SS4/14 - Capital extractions by run-off firms within the general insurance sector
		
Unspecified
		
PRA expectations of run-off firms proposing capital extractions
2.1 The PRA expects senior management and boards of run-off firms to assess carefully the level of capital required on an ongoing basis to ensure that the firm can run-off their business in an orderly fashion, including under adverse conditions. If a firm in run-off wishes to extract capital during the course of a run-off, the PRA expects the firm’s board and senior management to consider such proposals carefully and to be satisfied that the financial position after the proposed extraction will still remain adequate for the duration of the run-off.

		
Supervisory Statement 4/14 was updated in 2016 after Consultation Paper 42/15, which had following the aim:
In this consultation paper (CP), the Prudential Regulation Authority (PRA) proposes a supervisory statement that sets out the PRA’s expectation of compliance with prudential provisions in the PRA Rulebook for run-off firms in the general insurance sector.
The PRA set out its expectations regarding the factors that senior management of general insurance firms in run-off should take into account when considering making a request to the PRA to extract capital from the firm during the course of a run-off in Supervisory Statement 4/14. This statement also explains the approach the PRA takes when considering such requests.
		
https://www.bankofengland.co.uk/prudential-regulation/publication/2014/capital-extractions-by-run-off-firms-within-the-general-insurance-sector-ss
		
Apr-14
	
	

		
SS12/13 – Counterparty credit risk
		
One individual in a Significant Influence Function (SIF) (unspecified)
		
Annual SIF attestation of counterparty credit risk internal models
5.1 The PRA expects an appropriate individual in a Significant Influence Function (SIF)* role to provide to the PRA on an annual basis written attestation that:
- the firm’s internal approaches for which it has received a permission comply with the requirements in Part 3 Title II of the CRR, and any appropriate PRA counterparty credit risk supervisory statements; and
- where a model has been found not to be compliant, a credible plan for a return to compliance is in place and being completed.
5.2 Firms should agree the appropriate SIF for providing compliance attestations with the PRA, noting that the PRA would not expect to agree more than two SIFs to cover all the firm’s counterparty credit risk internal models as described in Part Three Title II of the CRR.
		
* The PRA expects over time to replace older references to the position under the previous regime with references to the Senior Managers Regime
		
https://www.bankofengland.co.uk/prudential-regulation/publication/2013/counterparty-credit-risk-ss
		
Apr-13
	
	

		
SS11/13 - Internal Ratings Based (IRB) approaches
		
One individual in a Significant Influence Function (SIF) (unspecified)
		
Corporate governance
5.1 Where a firm’s rating systems are used on a unified basis pursuant to CRR Article 20(6), the PRA considers that the governance requirements in CRR Article 189 can be met only if the subsidiary undertakings have delegated to the governing body or designated committee of the UK parent institution, UK parent financial holding company or UK parent mixed financial holding company responsibility for approval of all material aspects of rating and estimation processes.
5.2 The PRA expects an appropriate individual in a Senior Management Function (SMF) role to provide to the PRA on an annual basis written attestation that:
(i) the firm’s internal approaches for which it has received a permission comply with the CRR requirements and any applicable PRA IRB supervisory statements; and
(ii) where a model rating system has been found not to be compliant, a credible plan for a return to compliance is in place and being completed.
5.3 Firms should agree with the PRA the appropriate SMF for providing this attestation. The PRA would not expect to agree more than two SMFs to cover all the firm’s IRB models. In agreeing which SMF(s) may provide the annual attestation, the PRA will consider the firm’s arrangements for approving rating and estimation processes under CRR Article 189.
		
This version is applicable from 1 January 2022.
		
https://www.bankofengland.co.uk/prudential-regulation/publication/2013/internal-ratings-based-approaches-ss
		
Dec-13
	
	

		
SS9/13 - Securitisation: Significant Risk Transfer
		
Unspecified
		
High-level Significant Risk Transfer considerations
2.7 The PRA expects relevant senior management of a firm to be appropriately engaged in the execution of securitisation transactions that lead to a reduction in RWEA.
(i) For the purposes of such transactions, ‘relevant senior management’ means any individuals performing Senior Management Functions (SMFs) with oversight of such transactions, and any employees subject to the Certification Regime involved in the transactions (e.g. relevant Material Risk Takers (MRTs) under the Remuneration rules).
(ii) The level of senior management engagement may vary in line with the complexity of the transaction and the amount of reduction in RWEA. For transactions with complex structural features or risk characteristics that could materially affect the assessment of risk transfer or retention, the PRA expects oversight of these transactions to be linked to Prescribed Responsibility (PR) 7.
		
RWEA - risk-weighted exposure amounts
		
https://www.bankofengland.co.uk/prudential-regulation/publication/2013/securitisation-ss
		
Dec-13
	
	

		
SS7/13 - Definition of Capital (CRR Firms)
		
The holder of either PR O or PR CC (small firms)
		
Quality and composition of capital
2.5 The PRA expects the relevant Senior Management Function (SMF) to take responsibility for ensuring the quality of the capital structure overall. This includes being accountable for the quality of notifications to the PRA under Definition of Capital 7A to 7D, acknowledging that the act of signing and submitting any notification form may be delegated. In a relatively rare case where it may be necessary for a firm to include complex feature(s) in its CET1 instruments, the PRA expects the relevant SMF to inform the firm’s board in advance of the issuance, evidencing why the instrument cannot be issued without the proposed complex feature(s) and that, notwithstanding the proposed complexity, they consider the instrument compliant with the objective of the CRR. For the purpose of this paragraph and paragraph 2.6, the relevant SMF means the individual with:
(a) responsibility for managing the allocation and maintenance of the firm’s capital, funding and liquidity (Allocation of Responsibilities 4.1(7) – PR O); or
(b) responsibility for managing the firm’s financial resources (Allocation of Responsibilities 5.2(5) – PR CC) (small firms only).
The PRA expects the SMF’s proposal, in turn, to be subject to appropriate board-level review and discussion and the board should consider and suggest ways to minimise any proposed complexity. In cases where the board does adopt the SMF’s proposal and complex features are included in CET1 instruments, notwithstanding the PRA’s preference for simplicity (paragraph 2.4), the PRA expects the board to discuss whether the continued inclusion of the complex features within the share structure is necessary, at least annually as part of its Internal Capital Adequacy Assessment Process (ICAAP). The PRA  also expects firms to try to simplify the structure where possible.
		
SS7/13 was updated after CP20/19 in the following manner:
- Chapter 2 (Quality and composition of capital) was updated to clarify the PRA’s expectations on simple capital structures and the role of senior management and the firm’s board in relation to quality of the firm’s regulatory capital resources.
		
https://www.bankofengland.co.uk/prudential-regulation/publication/2013/crdiv-and-capital-ss
		
Dec-13