UK: UPDATE: Final Rules On Regulatory References Published

Last Updated: 12 October 2016
Article by Chris Holme

Firms have been waiting for the PRA and FCA to publish their final rules on regulatory references. The regulators see references as a key tool to allow firms to share information on individuals to support their assessment of potential new recruits as fit and proper. For banks (deposit takers and investment firms) and insurers, here's an outline of what you need to know:


  • The new referencing scheme will come into force on 7 March 2017, to coincide with the implementation of the Certification Regime and application of the Conduct Rules more broadly.

Which areas of financial services will be affected?

  • The rules on regulatory references will apply to banks (deposit takers and investment firms) and insurers, although the FCA is considering whether to extend these regulatory reference rules to other FCA regulated firms but a decision on this has not yet been made.

Which roles to the rules apply to?

  • Relevant regulated firms will need to seek regulatory references for candidates being recruited into Senior Management Functions, FCA controlled functions, Certification Functions, Senior Insurance Management Functions and other Key Function Holders for insurers, and notified non-executive directors (NEDs).

Which employers should firms seek references from?

  • Relevant regulated firms will need to seek references covering the last six years of employment from all former employers at which the individual performed a relevant function, irrespective of the firm type or their regulated status.
  • Firms must take reasonable steps to obtain references from overseas employers.


  • Regulated firms providing a reference should do so as soon as reasonably practicable - with the FCA suggesting this would be within six weeks.
  • Ideally, references should be obtained before an application for approval is submitted. However, the regulators recognise that there will inevitably be circumstances where this may not be possible. In these circumstances, references may be obtained no later than one month before the end of the application process. Where a reference also requires there to be a public announcement (such as where the current employer is listed), there is no time limit and references can be obtained at any time during the application process.


  • Regulated firms are required to give a reference using the prescribed template. The template should be referred to or attached to any request for a reference.
  • Unregulated firms who give a reference are not bound to use the template and are likely to give general employment references.

What information must be disclosed?

  • The reference must include individual conduct breaches only where disciplinary action has been taken leading to: a formal written warning; suspension (but not a suspension pending an internal investigation) or dismissal; or reduction or recovery of any of the person's remuneration due to a breach of a conduct requirement. A reference should provide a factual description of the breach (including dates) and its outcome.
  • All other information that is relevant to whether the candidate is fit and proper should also be included in the reference.This could include any information about mitigating circumstances. It might also include events that did not culminate in formal disciplinary action provided the employer has reasonable grounds for believing the misconduct took place.
  • However, the regulators would not normally expect the disclosures to include either commercially sensitive information or details of an employee's responsibilities in addition to their role.
  • The employer must remember it is under a duty to the employee and the new employer to exercise due skill and care in providing the reference. The regulators advise that fairness normally requires a firm to give an employee an opportunity to comment on information in a reference.
  • The obligation to give a reference is irrespective of any terms of any agreement reached with the individual on termination of employment, including a COT3 or Settlement Agreement.

Internal transfers

  • Where a firm is recruiting an individual from their own firm or from another group company, no full regulatory reference is required provided the recruiting firm has access to all the information it needs to assess fitness and propriety (for example, by accessing centralised records).

Updating references during employment:

  • The intention is not to create 'chains' of references:
    • Firms need only update the current employer
    • The updating requirement now applies to :
      • any notice period served between providing a reference and the individual leaving a firm
      • for ex-employers, six years from the date the individual's employment with the firm terminated.
  • The test for whether the reference needs to be updated is whether the new information that has come to light would have caused the firm providing the reference to have written the original reference that they provided differently, had that information been known at the time, and the difference is significant for an assessment of the fitness and propriety of the individual.
  • Misconduct that occurred more than six years ago but which came to light within six years from the date the individual left the firm may require disclosure if that misconduct is serious.
  • When a firm receives updated information, they should take account of the new information as part of the ongoing obligation to assess fitness and propriety.

Transitional provisions

  • Where firms are assessing fitness and propriety of individuals for the purpose of issuing a certificate to perform a certification function before 7 March 2017, no regulatory reference is needed if the individual is in that certified role immediately before that date.
  • If an application for approval as an approved person is made before 7 March 2017, there is no obligation to request a regulatory reference under the new rules, although the firm still remains obliged to request a reference under the current rules.

Changes in record-keeping requirements

  • Record-keeping requirements for banks and insurers is limited to six years retention of disciplinary and fitness and properness findings
  • A firm will not be in breach of the regulatory reference requirements if the reference does not include something for which the firm is not required to keep records.

Contact us if you would like more information on how to prepare for the implementation in March 2017.

For the template references please see:

PRA Policy Statement on Regulatory References.

FCA Policy Statement on Regulatory References.

UPDATE: Final Rules On Regulatory References Published

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Harbottle & Lewis LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Harbottle & Lewis LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions