Hiring under SMCR: practical interview questions for senior manager candidates

Why Interviewing Under SMCR Is Different

Recruiting a Senior Manager into an FCA-regulated firm is not simply a question of finding the most capable candidate. Under the Senior Managers and Certification Regime (SMCR), every appointment to a Senior Management Function (SMF) carries personal regulatory accountability that extends to the individual’s conduct, decision-making and awareness of regulatory obligations.

The interview process for an SMF candidate must do two things simultaneously: assess the individual’s professional capability for the role, and assess their fitness and propriety to hold the regulatory function. These assessments overlap but are not the same. A technically strong candidate who has a limited understanding of SMCR accountability — or who has conduct issues in their background — is not a safe appointment, regardless of their skills.

This guide sets out practical interview questions for key Senior Management Functions, with a note on what each question is designed to assess. Whether you are interviewing for an SMF16 (Compliance Oversight), SMF17 (MLRO), SMF2 (Chief Finance), or a broader SMF3 (Executive Director) appointment, the framework applies.

Before the Interview: Fitness and Propriety Pre-Screening

Before the interview stage, firms appointing to an SMF role should complete several pre-screening steps:

• FCA Register check: Confirm the individual’s current and historic approved person status via the FCA Financial Services Register. Check for any historic enforcement actions, suspensions or conditions attached to previous approvals.
• Regulatory reference request: Obtain regulatory references from all regulated employers in the previous five years. These references must follow the mandated SMCR regulatory reference format and disclose any conduct rules breaches or fitness and propriety findings.
• Criminal record check: Relevant criminal convictions are a material fitness and propriety consideration. Check your firm’s policy and the FCA’s guidance on spent convictions.
• Credit and financial history check: Particularly relevant for SMF2 (CFO) and SMF16 (Compliance Oversight) roles. Financial difficulty in a senior finance or compliance leader raises specific conduct concerns the FCA expects firms to assess.

The interview builds on pre-screening. If pre-screening raises concerns, those should inform the interview questions directly — the interview is an opportunity to explore concerns, not to ignore them.

Core SMCR Interview Questions (All SMF Roles)

Understanding of Personal Accountability

“How do you understand the scope of your personal accountability under SMCR in this role?”

What this assesses: The candidate’s working understanding of the Senior Manager Conduct Rules and the Duty of Responsibility. A strong candidate will be able to articulate that their accountability is defined by their Statement of Responsibilities, that it extends to areas within their stated remit even when they are not personally making every decision, and that they are expected to have taken reasonable steps to prevent breaches within their area.

Candidates who conflate SMCR accountability with general management responsibility, or who describe their accountability in vague terms (“I’m responsible for my team”), may not fully understand the regulatory framework they will be operating under.

“Walk me through how you would approach preparing your Statement of Responsibilities for this role.”

What this assesses: Practical familiarity with the SoR as a document. A candidate who has held an SMF before should understand that the SoR is a pre-approval document submitted to the FCA, that it needs to specifically and accurately describe their responsibilities, and that it must be kept current. They should understand the difference between a well-drafted SoR (specific, complete, current) and a poorly drafted one (generic, aspirational, out of date).

Candidates with no prior SMF experience may not have prepared an SoR before — this is not disqualifying, but they should demonstrate an understanding of what it is and why it matters.

Conduct Rules and Culture

“Tell me about a situation where you identified a conduct concern in your team and how you handled it.”

What this assesses: The candidate’s practical approach to conduct rules management and their willingness to escalate. Under SMCR, Senior Managers are responsible for the conduct culture within their area. A strong answer will describe a specific situation, explain how the concern was identified (proactively or through reporting), what the candidate did in response (investigation, escalation, documentation), and what the outcome was.

Be alert to candidates who describe conduct concerns only in terms of others’ failings, or who cannot give a specific example despite years of regulatory experience.

“What steps do you take to ensure your team understands and applies the FCA Conduct Rules in practice?”

What this assesses: Whether the candidate approaches conduct rules as a training and documentation exercise, or as a genuine cultural and management responsibility. Strong candidates will describe specific methods — regular team discussions, embedding conduct rules into performance management, using real examples from within the industry, escalation frameworks. See our Individual Conduct Rules guide for the full set of rules candidates should be applying.

Regulatory Relationship and Engagement

“Describe your experience of engaging with the FCA — either in response to a supervisory review, a thematic review, or a query.”

What this assesses: The candidate’s practical experience of FCA engagement and their approach to regulatory relationships. Under the Senior Manager Conduct Rules, SMF holders must be open and cooperative with regulators. A candidate who has direct experience of FCA engagement can describe how they managed the process — the preparation, the communication, the documentation, the follow-through. Candidates who have only theoretical familiarity with FCA engagement processes carry a specific risk in SMF roles at firms where supervisory contact is likely.

“Have you ever been the subject of a regulatory reference request, or provided a regulatory reference for a former colleague? How did you handle it?”

What this assesses: Familiarity with the regulatory reference process and integrity in executing it. A strong candidate will understand that regulatory references are mandatory, that they must be honest and complete even where that is uncomfortable, and that providing an incomplete or misleading regulatory reference is itself a conduct concern. Their answer will give you some insight into how they approach difficult disclosure situations.

Role-Specific Questions: SMF16 (Compliance Oversight)

For candidates interviewing for a Compliance Oversight function, the following questions probe the specific requirements of the SMF16 role. See our SMF16 guide for the full scope of the function.

“How do you structure a compliance monitoring programme and how do you ensure it remains risk-based?”

What this assesses: The candidate’s approach to the core deliverable of the compliance oversight function. A strong answer will describe a risk-based methodology — identifying the highest-risk activities, mapping these to regulatory obligations, designing monitoring activities proportionate to the risk, and reviewing the programme annually. Candidates who describe compliance monitoring primarily in terms of checking boxes rather than managing risk may struggle in a substantive SMF16 role.

“What is your approach to presenting compliance risk to the board?”

What this assesses: The candidate’s ability to translate regulatory complexity into board-level decision-making. The SMF16 holder is the interface between the compliance function and senior governance. A strong candidate will describe how they frame compliance risk in terms that resonate with non-specialists — commercial implications, regulatory consequence, reputational risk — rather than defaulting to regulatory jargon. They will also describe how they calibrate the level of detail depending on the audience.

“How have you managed a situation where the business wanted to proceed with a product, campaign or activity that you had compliance concerns about?”

What this assesses: The candidate’s ability to operate as a genuine second line of defence rather than a business support function. This is one of the most important questions for an SMF16 candidate. Compliance Oversight must be genuinely independent — willing to say no, escalate concerns, and document disagreements. A candidate who describes only situations where they found a way to make things work may lack the necessary independence. A candidate who describes appropriate escalation, formal second opinion processes, and board escalation in the appropriate cases is demonstrating the right framework.

Role-Specific Questions: SMF17 (MLRO)

The MLRO function carries specific statutory obligations under the Proceeds of Crime Act 2002 and the Money Laundering Regulations. See our SMF17 MLRO guide for a detailed breakdown of the function.

“Walk me through how you handle an internal SAR — from receipt to your decision on whether to submit an external report.”

What this assesses: The candidate’s practical MLRO experience and their decision-making framework. An experienced MLRO will describe a structured process: logging the internal SAR, assessing the information against the knowledge or suspicion threshold, seeking additional information where appropriate, making a documented decision on whether to submit a Suspicious Activity Report to the NCA, and maintaining records of the decision and rationale. Candidates who describe the process vaguely, or who cannot articulate the knowledge/suspicion threshold, may lack the depth of experience the role requires.

“How do you keep the SAR process and AML framework current as the firm’s business changes?”

What this assesses: Whether the candidate treats AML compliance as a static programme or a dynamic risk management function. Strong MLROs conduct regular risk assessments, review their firm’s AML policies against regulatory changes and typology guidance from the JMLSG, update training programmes as risks evolve, and proactively engage with changes to the firm’s business model that may alter the risk profile. See our Suspicious Activity Reports guide for further context.

Role-Specific Questions: SMF2 (Chief Finance Function)

For candidates for the CFO or Finance Director function at FCA-regulated firms, the SMCR accountability dimension is often less familiar than the finance leadership dimension. See our SMF2 guide for the specific regulatory scope of the function.

“What regulatory reporting obligations would you hold as SMF2 at this firm, and how would you ensure they are met?”

What this assesses: The candidate’s awareness of the finance-specific regulatory obligations that sit within SMF2 accountability — including regulatory capital reporting (COREP, FINREP depending on firm type), financial crime provisions, and any firm-specific reporting requirements under the FCA’s supervision relationship. Candidates who understand only the commercial finance aspects of a CFO role without the regulatory reporting dimension may be underprepared for the SMF2 accountability they will carry. See our Regulatory Reporting guide for an overview of key reporting frameworks.

“How would you approach building the relationship between the finance function and the compliance and risk functions?”

What this assesses: The candidate’s understanding of the three lines of defence model and how finance, risk and compliance interact in a regulated firm. A strong SMF2 candidate will recognise that the CFO’s accountability map will overlap with the SMF16 and SMF4 accountability maps, and that effective governance depends on clear boundaries, good communication, and a shared understanding of where each function’s responsibilities begin and end.

Closing Questions for All SMF Candidates

“Is there anything in your background that you think we should know about in the context of your FCA fitness and propriety assessment?”

What this assesses: The candidate’s disclosure instincts. This is a direct invitation to disclose matters that may be relevant to the fitness and propriety assessment — historic regulatory issues, financial difficulties, relevant criminal matters. A candidate who discloses appropriately demonstrates the kind of transparency the FCA expects of Senior Managers. A candidate who later turns out to have undisclosed matters relevant to fitness and propriety has already demonstrated a conduct concern in the interview itself.

“What does ‘acting with integrity’ mean to you in this role specifically — not in general terms?”

What this assesses: Whether the candidate can translate a high-level Conduct Rule into practical, role-specific application. A generic answer about honesty and professionalism suggests the candidate is not engaging with the conduct rules framework as a working standard. A strong answer will describe specific situations in the role — how they would handle a conflict of interest, how they would respond to pressure from a more senior colleague, how they would manage a situation where the regulatory requirement and the commercial desire of the business are in tension.

Using These Questions in Practice

These questions are most effective when used as a structured component of a broader interview process. The SMCR-specific questions should complement, not replace, the professional and technical assessment of the candidate’s capability for the role itself.

Firms that conduct thorough fitness and propriety interviews and document their assessment are in a significantly stronger position in the event of a future regulatory review of an appointment decision. The Duty of Responsibility means that a poor appointment — where warning signs were present and were not followed up — carries regulatory risk for the firm and for any Senior Manager who signed off the appointment.

How FD Capital Supports SMF Hiring

FD Capital places Senior Managers into FCA-regulated firms on permanent, interim and fractional bases. Our candidates are pre-assessed for relevant SMCR awareness and hold experience in FCA-regulated environments. We understand the regulatory reference process, the Form A pre-approval timeline, and the fitness and propriety standards the FCA applies.

Key services for regulated firm hiring:

• SMCR compliance recruitment — SMF16 Compliance Oversight, permanent, interim and fractional
• MLRO recruitment — SMF17 MLRO appointments across all regulated firm types
• AMLRO recruitment — Deputy MLRO and AMLRO appointments supporting the SMF17 function
• SMF2 regulated CFO recruitment — finance directors and CFOs at FCA-regulated firms
• Chief Compliance Officer recruitment — CCO appointments at smaller regulated firms and fintechs
• Risk and compliance recruitment — the broader team below SMF level
• FCA regulated firm recruitment — overview of our full service for regulated businesses

See also our post on SMCR Phase 1 Reform 2026 for the latest regulatory context, and our main SMCR guide for a comprehensive overview of the regime.

Related Reading

Further reading on SMCR appointments: SMCR Guide | SMCR for Limited Scope Firms | SMCR vs the Approved Persons Regime | SMCR Phase 1 Reform 2026 | SMF16 Compliance Oversight Guide | SMF17 MLRO Guide | SMF2 Chief Finance Function Guide | SMF24 Chief Operations Guide | SMF18 Guide | SMF4 CRO Guide | Individual Conduct Rules | Senior Manager Conduct Rules | FCA Regulated Firm Recruitment