FCA CP15/31 and PRA CP36/15 Strengthening Accountability in Banking Highlights

Proposals for regulatory references were outlined in the consultation paper published by the regulators on Tuesday [6 October 2015]. 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 a continuing 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)