SYSC 22.2 Getting, giving and updating references: the main rules

Obligation to obtain references (full scope regulatory reference firms only)

SYSC 22.2.1R
  1. (1)

    1If a full scope regulatory reference firm (A) is considering:

    1. (a)

      permitting or appointing someone (P) to perform a controlled function; or

    2. (b)

      issuing a certificate under the certification regime for P;

    (as explained in more detail in rows (A) and (B) of the table in SYSC 22.2.3R), A must take reasonable steps to obtain appropriate references from:

    1. (c)

      P’s current employer; and

    2. (d)

      anyone who has been P’s employer in the past six years.

  2. (2)

    A must take reasonable steps to obtain the reference before the time in column two of the applicable row in the table in SYSC 22.2.3R.

  3. (3)

    A must in particular request:

    1. (a)

      the information in SYSC 22.2.2R(1) to (3); and

    2. (b)

      (if P’s current or previous employer is also a full scope regulatory reference firm) the information in SYSC 22.2.2R(4) (questions (A) to (F) of Part One of SYSC 22 Annex 1R).

  4. (4)

    When deciding what information to request under (1), A must have regard to the factors in SYSC 22.2.2R(5) (Factors set out in SYSC 22 Annex 2R).

Obligation to give references

SYSC 22.2.2R
  1. (1)

    A firm (B) must provide a reference to another firm (A) as soon as reasonably practicable if:

    1. (a)

      A is considering:

      1. (i)

        permitting or appointing someone (P) to perform a controlled function; or

      2. (ii)

        issuing a certificate under the certification regime for P; or

      3. (iii)

        appointing P to another position in the table in SYSC 22.2.3R;

      (as explained in more detail in the table in SYSC 22.2.3R);

    2. (b)

      A makes a request, for a reference or other information in respect of P from B, in B’s capacity as P’s current or former employer;

    3. (c)

      B:

      1. (i)

        is P’s current employer; or

      2. (ii)

        has been P’s employer at any time in the six year period preceding the request in (1)(b); and

    4. (d)

      A indicates to B the purpose of the request.

  2. (2)

    B must disclose to A in the reference all information of which B is aware that B reasonably considers to be relevant to A’s assessment of whether P is fit and proper.

  3. (3)

    B is only required to disclose under (1) and (2) something that occurred or existed:

    1. (a)

      in the six years before the request for a reference; or

    2. (b)

      between the date of the request for the reference and the date B gives the reference; or

    3. (c)

      (in the case of serious misconduct) at any time.

    [Note: See SYSC 22.5.10G and SYSC 22.5.11G for guidance on the meaning of serious misconduct]

  4. (4)

    If B is a full scope regulatory reference firm:

    1. (a)

      B must in addition disclose the information in questions (A) to (F) of Part One of SYSC 22 Annex 1R (Template for regulatory references given by relevant authorised persons and disclosure requirements); and

    2. (b)

      B must disclose the information in (a) whether or not A is a full scope regulatory reference firm.

  5. (5)

    When deciding what information to give to A under (1) to (3), B must have regard to the factors in SYSC 22 Annex 2R (Factors to take into account when asking for and giving regulatory references).

SYSC 22.2.3R

Table: What positions need a reference

Position

When to obtain reference

Comments

(A) Permitting or appointing someone to perform an FCA controlled function or a PRA controlled function.

One month before the end of the application period

Where a request for a reference would require:

(a) the firm requesting the reference;

(b) the employer giving the reference; or

(c) any other person;

to make a mandatory disclosure prior to P disclosing to its current employer that such application has been made, the date is the end of the application period.

(B) Issuing a certificate under section 63F of the Act (Certification of employees by relevant authorised persons).

Before the certificate is issued

This includes renewing an existing certificate.

(C) Appointing someone to any of the following positions (as defined in the PRA Rulebook):

(a) a notified non-executive director;

(b) a credit union non-executive director; or

(c) a key function holder.

Not applicable

SYSC 22.2.1R (obligation to obtain a reference) does not apply to a firm appointing someone to the position in column (1).

However SYSC 22.2.2R does apply to a firm asked to give a reference to a firm appointing someone to the position in column (1).

Note 1: Mandatory disclosure means an obligation in any applicable laws, regulations or rules to declare or disclose information to the public.

Note 2: P refers to the employee or ex-employee about whom the reference is given as defined in more detail in SYSC 22.2.1R and SYSC 22.2.2R.

Note 3: The application period means the period for consideration referred to in section 61 of the Act (Determination of application).

Obligation to revise references: The main rule (full scope regulatory reference firms only)

SYSC 22.2.4R

If at any time:

  1. (1)

    a full scope regulatory reference firm (B) has given a reference under SYSC 22.2.2R to another firm (A) about an employee or ex-employee of B (P);

  2. (2)

    B was also a full scope regulatory reference firm when it gave the reference in (1);

  3. (3)

    either of the following applies:

    1. (a)

      B is aware of matters or circumstances that mean that if B had been aware of them when giving that reference, this chapter would have required B to draft the reference differently; or

    2. (b)

      the following applies:

      1. (i)

        B has since giving the reference reached conclusions of the type described in question (E) of Part One of SYSC 22 Annex 1R or taken disciplinary action of the type described in question (F) of Part One of SYSC 22 Annex 1R; and

      2. (ii)

        if B had taken or reached those conclusions or actions within the six year period referred to in Part One of SYSC 22 Annex 1R, this chapter would have required B to draft the reference differently; and

  4. (4)

    it would be reasonable to consider the differences in (3) to be significant for an assessment by A of the fitness and propriety of P for the role at A for which the reference was given;

B must:

  1. (5)

    make reasonable inquiries as to the identity of P’s current employer; and

  2. (6)

    give A details of those differences in writing as soon as reasonably practicable, unless SYSC 22.2.5R says that B does not have to do so.

SYSC 22.2.5R

B does not need to update A if:

  1. (1)

    A is no longer a firm;

  2. (2)

    P has not yet been employed by A (because, for example, P is still working their notice period with B) and it is no longer intended for A to employ P;

  3. (3)

    A is no longer P’s employer; or

  4. (4)

    despite making reasonable enquiries under SYSC 22.2.4R, B does not know whether P is still employed by A.

SYSC 22.2.6R

This rule sets out time limits about the obligation to update a reference in SYSC 22.2.4R.

  1. (1)

    If B still employs P, SYSC 22.2.4R applies throughout the period B remains employed.

  2. (2)

    If B no longer employs P, the obligation to update ends six years after P ceased to be employed by B.

  3. (3)

    If B no longer employs P and the matters or circumstances are not serious misconduct by P, B does not have to disclose something if it did not occur or exist in the six year period ending on the date B gave the original reference. This limitation applies in addition to the one in (2).

[Note: See SYSC 22.5.10G and SYSC 22.5.11G for guidance on the meaning of serious misconduct]

Obligation to revise references: Finding out who the current employer is (all firms)

SYSC 22.2.7R

If at any time:

  1. (1)

    a full scope regulatory reference firm (B) has given a reference under SYSC 22.2.2R to another firm (A) about an employee or ex-employee of B (P);

  2. (2)

    B asks A whether P is still an employee of A; and

  3. (3)

    B gave A the reference no more than six years ago;

A must answer that question as soon as reasonably practicable, even if B does not tell A why it wants to know that information.