Proposals for regulatory references were outlined in the consultation paper published by the regulators yesterday. Firms are already required to provide references upon request, the new regulation requires Firms to request references for people that fall within the Senior Managers and Certification regimes.

Highlights are:

  • Regulatory References will be required for people performing Senior Managers Functions and Certification Functions, including Notified NEDs
  • Regulatory references will be required even if recruiting from within the same Firm or another group company
  • Regulatory references will include details of:◦roles performed, certification or controlled functions or NED positions held:
    • conduct rule breaches*
    • where the Firm has determined the person not to be ‘Fit and Proper’
    • disciplinary action relating to the previous two bullets
  • Firms will have acontinuing obligation to update regulatory references given in the previous six years should they become aware of matters that would cause them to draft a reference differently
  • Firms will be required to enhance systems and controls relating to the processing and record keeping of regulatory references including records relating to ex-employees
  • Firms must avoid giving legal undertakings to suppress or omit relevant information from regulatory references
  • The regulators intend to clarify that compliance with the regulatory reference and fitness and propriety rules will form part of the Prescribed Responsibilities
  • The proposal for regulatory references to cover a period of 5 or 6 years will be finalised based on feedback to the consultation paper
  • The consultation paper includes a draft regulatory references template

*FCA Conduct Rules (COCON), PRA Conduct Rules or Conduct Standards, and Statements of Principle and Code of Practice for Approved Persons (APER)

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