Smith-Cumming died suddenly at his home on 14 June 1923, shortly before he was due to retire, and was replaced as C by Admiral Sir Hugh "Quex" Sinclair. Sinclair created the following sections:
A central foreign counter-espionage Circulating Section, Section V, to liaise with the Security Service to collate counter-espionage reports from overseas stations.
An economic intelligence section, Section VII, to deal with trade, industrial and contraband.
A clandestine radio communications organisation, Section VIII, to communicate with operatives and agents overseas.
Section N to exploit the contents of foreign diplomatic bags
Section D to conduct political covert actions and paramilitary operations in time of war. Section D would come to be the foundation of the Special Operations Executive (SOE) during the Second World War.[10]