The phrase "a substantial part of activities" decides how far Section 250 reaches into your organisation, and the statute never defines it. This guide looks at how the same words are used in analogous legislation, the factors that push an assessment one way or the other, and why over-inclusion is the safer error.
Why does "a substantial part" decide everything?
Section 250(3) of the Crime and Policing Act 2026 defines a "senior manager" as an individual who plays a significant role in (a) the making of decisions about how the whole or a substantial part of the activities of the body corporate or partnership are to be managed or organised, or (b) the managing or organising of the whole or a substantial part of those activities. How you read "a substantial part of activities" is what sets the reach of Section 250. Read it narrowly and the senior-manager population shrinks to the board. Read it broadly and it extends to every divisional and functional head. The statute leaves the phrase undefined.
This is general information, not legal advice. Consult a qualified solicitor or FCA-regulated compliance adviser for your firm's specific situation.
When a statute uses an ordinary word like "substantial" without defining it, a court applies it functionally, on the facts. That makes "substantial part" the part of the test most likely to be argued over in any future enforcement, and the part a firm most needs a defensible, written position on. The sections below set out a working framework, while staying clear about what is settled and what is interpretation.
Where else does this language appear?
The wording of s.250(3) is not new. The same "senior manager" definition, an individual who plays a significant role in the making of decisions about, or the managing or organising of, the whole or a substantial part of the activities, appears almost verbatim in section 196 of the Economic Crime and Corporate Transparency Act 2023, which attributes certain economic-crime offences to organisations through their senior managers. The functional-test wording itself traces further back, to the "senior manager" test in section 1(4)(c) of the Corporate Manslaughter and Corporate Homicide Act 2007.
The parallel is useful in two ways. It tells you the drafters chose established language deliberately, so the s.250 test should be read consistently with how "senior manager" is already understood. And it means the guidance and commentary developing around the ECCTA senior-manager concept is directly relevant background. None of these Acts defines "substantial", so the interpretive question stays open under all of them.
What is genuinely new in 2026 is the scope of the offence being attributed. Section 250 is not limited to a category of economic crime. Under s.250(1), where a senior manager acting within the actual or apparent scope of their authority commits any offence under the law of England and Wales, Scotland or Northern Ireland, the organisation also commits the same offence. The attribution structure is borrowed; the uncapped offence scope, reaching any UK criminal offence rather than a defined list, is the new element.
What does "activities" mean for an FCA-regulated firm?
Before assessing what is "substantial", a firm has to be clear about the denominator. Section 250 refers to the activities of the body corporate or partnership without limiting them to regulated activities. For an FCA-regulated firm that is a trap, because compliance teams instinctively scope to the regulated perimeter, the activities the FCA Handbook governs.
The statute is broader. Technology, operations, finance, distribution, human resources and premises are all activities of the organisation, regulated or not. A person can manage a substantial part of the firm's activities while touching nothing the FCA would call a regulated activity. The head of technology is the standard example. Getting the denominator right, all activities and not only regulated ones, is the single most important step. An assessment scoped only to regulated activities will systematically understate the senior-manager population.
Which factors suggest "a substantial part" is met?
No single metric decides it, but several factors point towards a substantial part.
Share of revenue, assets or client base. A person responsible for a business line that represents a meaningful fraction of the firm's economics is a strong candidate.
Headcount and budget. Authority over a large share of the firm's people or spend indicates organising a substantial part.
Criticality. A function the firm could not operate without, its trading infrastructure or its core platform, can be substantial even where it is not the largest by headcount or revenue.
Firm-wide remit. A function such as risk, finance or compliance whose authority spans the whole organisation is, almost by definition, substantial.
These factors are cumulative, not a checklist with a pass mark. A reviewer assessing whether the firm got it right will look at the combination, and at whether the firm applied the factors consistently across comparable roles.
Which factors suggest it is not met?
The mirror image matters just as much, because over-recording weakens a firm's evidence in the same way under-recording does. Factors pointing away from "substantial" include a narrow or specialist remit that affects only a small, self-contained part of the business; authority that is purely advisory, with no power to decide or direct; responsibility for a function that is genuinely minor in the context of the whole organisation; and roles where any apparent authority is in fact exercised by someone more senior.
The goal is a true assessment, not the longest possible list. A firm that classifies everyone with a senior-sounding title as in scope has not applied the test. It has avoided it, and a reviewer will notice the absence of discrimination as readily as an obvious omission.
A worked example: the head of retail distribution
Take a head of retail distribution at a multi-channel asset manager, responsible for the firm's intermediary, direct and platform sales across the United Kingdom. They are not an SMF holder; distribution is not, in itself, a regulated function requiring pre-approval at this firm. Are they within Section 250?
Apply the factors. Their channels bring in a substantial share of the firm's net new assets, so the revenue factor points strongly towards "substantial". They control a significant sales budget and headcount. Their remit spans a whole side of the business, not a niche product. Against that, they do not set investment policy or manage the firm's operations.
On balance, the head of retail distribution is a strong candidate to meet s.250(3). They play a significant role in organising a substantial part of the firm's activities, its entire route to market, even though SM&CR never required their approval. Writing the analysis down is what shows exactly how the firm reached that verdict.
Why is over-inclusion the safer error?
The two errors are not symmetrical. Recording someone as in scope who a court might later treat as borderline costs the firm a declaration and an entry in the evidence pack. Omitting someone a court later finds met s.250(3) weakens the firm's evidential record at the moment it matters most, because it suggests the firm did not understand who its senior managers were.
That asymmetry argues for resolving genuine doubt towards inclusion. Not as a blanket rule that abandons the test, but as the sensible tie-breaker when the factors are evenly balanced. A declaration sent to someone who turns out to be borderline is harmless. A senior manager the firm never identified is the gap an enforcement action is built on.
How do you evidence the "substantial part" assessment?
Because "substantial" is a judgement, the evidence is the reasoning. For each in-scope individual, record which factors drove the conclusion, the revenue share, the budget authority, the firm-wide remit, with reference to the artefacts that support them: the organisation chart, the scope of authority delegations, the formal reporting lines from material teams. A reviewer reading the record two years on should be able to understand why the firm drew the line where it did.
This is the part of a gap analysis that cannot be reduced to comparing two lists, because no list contains the judgement. It has to be applied individual by individual and written down. CoverProof persists that reasoning for every classification alongside the input hash and methodology version, precisely because the "substantial part" question is the one most likely to be tested.
Start there. Run the gap analysis with all activities in scope, write the reasoning against each borderline role, and carry it through to the declaration cycle and the evidence pack before 29 June 2026, when s.250 comes into force.
Related articles
Who qualifies as a senior manager under Section 250? A role-by-role guide
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The Section 250 functional test: why SM&CR-covered isn't Section 250-covered
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What Is Section 250 of the Crime and Policing Act 2026?
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- Crime and Policing Act 2026, s.250www.legislation.gov.uk/ukpga/2026/20/section/250
- Economic Crime and Corporate Transparency Act 2023, s.196www.legislation.gov.uk/ukpga/2023/56/section/196
- Corporate Manslaughter and Corporate Homicide Act 2007, s.1www.legislation.gov.uk/ukpga/2007/19/section/1
- FCA Handbook — SYSCwww.handbook.fca.org.uk/handbook/SYSC/
- FCA — Senior Managers and Certification Regimewww.fca.org.uk/firms/senior-managers-certification-regime