I can confirm that they grade on a strict bell curve, which means that a certain small percentage at the bottom of the scale will fail. It's possible that this percentage varies, but I know all the others (LP, P, HP, H) are definitely set percentages.
Keep in mind you'll also be taking many of your M1 lecture classes with the SMP students and a couple of much smaller programs, but they're graded against your curve, not as a part of it. It's a little disconcerting the first few weeks to realize the extra 150-200 students in the lecture hall have nothing to do with you except to take the gunner front-row seats.