FCA and PRA Publish Final Rules on Regulatory References

2 mins

Posted on 11 Oct 2016

The FCA and the PRA have issued their final rules on regulatory references which will apply from 7 March 2017.

The regulatory references regime will apply to banks, building societies, credit unions and PRA investment firms, the Society of Lloyd’s and Solvency II or large non-directive insurers recruiting candidates to:

  • senior management functions, under the Senior Managers Regime
  • senior insurance management functions, under the Senior Insurance Managers Regime
  • FCA controlled functions
  • significant harm functions, under the certification regime
  • notified non-executive director roles
  • key function holder roles within an insurer

From 17 March 2017, relevant firms will have to:

  • take reasonable steps to obtain references going back over six years of employment. However, firms will not be required to obtain a full regulatory reference when recruiting from their own firm or another group company, provided that the group’s internal policies and procedures allow access to all the information needed to assess fitness and propriety; 
  • use the mandatory reference template when requesting and providing references. These templates have been changed from the original draft. Firms will only have to include breaches of the Conduct Rules/Standards and the FCA’s Statements of Principle and Code of Practice for Approved Persons (APER) where disciplinary action has been taken. Nevertheless, firms are still required to provide all other information which is relevant to the candidate’s fitness and propriety. Firms can choose to use the new template now if they wish;
  • update regulatory references they have given for a period of six years. This will apply where new information has come to light that would have caused the firm to write the reference differently had it known of that information at the time, and the difference is significant for an assessment of the individual’s fitness and propriety. Firms will only have to update the employee’s current employer.

FCA Policy Statement: Strengthening accountability in banking and insurance: regulatory references final rules (PS16/22)

PRA Policy Statement: Strengthening accountability in banking and insurance: PRA requirements on regulatory references (Part II) (PS27/16)

The articles published on this website, current at the date of publication, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your own circumstances should always be sought separately before taking any action.

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