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SYSC 22.7 Getting references: additional rules and guidance for full scope regulatory reference firms

Intra-group transfers

SYSC 22.7.1R
  1. (1)

    1This rule applies when:

    1. (a)

      a full scope regulatory reference firm (A) would otherwise have to ask another person (B) for a reference under SYSC 22.2.1R; and

    2. (b)

      A and B are in the same group.

  2. (2)

    A need not ask for a reference from B if there are adequate arrangements in place under which A has access to the same information sources as B to the extent that they are relevant to things A has to ask B under SYSC 22.2.1R (Obligation to obtain references).

  3. (3)

    If A only has access to some of the information sources in (2), A may ask for a reference that only covers the sources to which A does not have such access.

  4. (4)

    If A, in accordance with this rule, does not ask for a reference or a full reference it must access the information resources referred to in this rule and get the relevant information within the time specified by SYSC 22.2.3R.

SYSC 22.7.2G
  1. (1)

    SYSC 22.7.1R means that a firm recruiting someone from another member of its group is not required to request a reference from the other where the group has centralised records or alternative measures in place to ensure sharing of relevant information between its members.

  2. (2)

    The recruiting firm should be satisfied that the centralised or alternative measures ensure relevant information is made available as part of the fit and proper assessment of the recruit.

Who should be asked to give a reference

SYSC 22.7.3G

The Glossary definition of employer covers more than just a conventional employer and so it may not always be obvious who a person’s employer is. Therefore a full scope regulatory reference firm appointing someone to a position that requires a reference may have to get the employee’s help in identifying their previous employers.

SYSC 22.7.4G
  1. (1)

    SYSC 22.2.1R (Obligation of a full scope regulatory reference firm to try to obtain a reference) applies even if the ex-employer is not a firm.

  2. (2)

    A full scope regulatory reference firm should take all reasonable steps to try to obtain the reference in these circumstances. However, the FCA accepts that the previous employer may not be willing to give sufficient information.

Asking for a reference to be updated

SYSC 22.7.5G
  1. (1)

    SYSC 22.2.1R (Obligation of a full scope regulatory reference firm to try to obtain a reference) applies even if the employer has already got a reference for the employee. For example:

    1. (a)

      a relevant authorised person should have a reference whenever it renews the certificate of a certification employee; and

    2. (b)

      changing jobs within the same full scope regulatory reference firm may require a reference.

  2. (2)

    However, the full scope regulatory reference firm does not necessarily need to obtain a new reference each time (a) or (b) above occurs. That is because an existing reference will very often still be appropriate for the purpose (see SYSC 22.7.6G to SYSC 22.7.8G).

SYSC 22.7.6G

If a relevant authorised person (A):

  1. (1)

    appoints someone (P) to a specified significant-harm function position;

  2. (2)

    obtains a reference from an ex-employer; and

  3. (3)

    later wishes to renew P’s certificate under the certification regime;

it is unlikely that A will need to ask for another reference from that ex-employer or ask for it to be reissued unless there is a change in P’s role of the type described in SYSC 5.2.17G (major changes in role).

SYSC 22.7.7G
  1. (1)

    If a full scope regulatory reference firm (A):

    1. (a)

      appoints someone (P) to a specified significant-harm function or an approved person position;

    2. (b)

      obtains a reference from an ex-employer (B); and

    3. (c)

      later wishes to:

      1. (i)

        appoint P to another specified significant-harm function or approved person position; or

      2. (ii)

        keep P in the same specified significant-harm function but make a change in P’s role of the type described in SYSC 5.2.17G (major changes in role), whether that change is made at a time when the certificate has not yet come up for renewal or at the time it is being reissued; or

      3. (iii)

        move P from a specified significant-harm function to an approved person position or vice versa;

A should consider whether to ask B to reissue or amend its reference.

  1. (2)

    A may decide that it is not necessary to ask B to reissue or amend its reference. For example, A may decide that:

    1. (a)

      the existing reference already covers everything necessary; or

    2. (b)

      (where B is not a firm) B will not give any further information.

SYSC 22.7.8G

If:

  1. (1)

    a firm (A) appoints someone (P) to a specified significant-harm function or approved person position;

  2. (2)

    A obtains a reference from an ex-employer (B);

  3. (3)

    later P transfers to a specified significant-harm function or an approved person position with a full scope regulatory reference firm in A’s group (C);

  4. (4)

    B’s reference is:

    1. (a)

      addressed to all firms in A’s group; or

    2. (b)

      otherwise drafted so that it is clear that C may rely on it; and

  5. (5)

    C does not need to ask for the reference to be reissued or amended, taking account of SYSC 22.7.6G and SYSC 22.7.7G;

C may be able to rely on that reference without asking B to give another one.

When references are to be obtained

SYSC 22.7.9G

If a full scope regulatory reference firm is unable to obtain a reference by the time in column two of the table in SYSC 22.2.3R, it should still try to obtain the reference as soon as possible afterwards.

SYSC 22.7.10G
  1. (1)

    Where a relevant authorised person needs to fill a vacancy for a specified significant-harm function which could not have reasonably been foreseen, the FCA recognises that it may not be reasonable to expect the relevant authorised person to obtain references prior to issuing a certificate.

  2. (2)

    In such cases, the relevant authorised person should take up the reference as soon as reasonably possible.

  3. (3)

    If a reference obtained later raises concerns about the person’s fitness and propriety, the relevant authorised person should revisit its decision to issue the person with a certificate.

SYSC 22.7.11G
  1. (1)

    Although this chapter (see SYSC 22.2.3R) only requires a full scope regulatory reference firm to try to get a reference for a person it is recruiting to perform an FCA controlled function or a PRA controlled function towards the end of the application process, the FCA would normally expect a firm to have obtained the reference before the application for approval is made.

  2. (2)

    The main examples of circumstances in which it would be reasonable for a firm to delay getting a reference are where asking for a reference earlier will create a serious risk of:

    1. (a)

      breaching the confidentiality of a wider commercial or corporate transaction;

    2. (b)

      prematurely triggering the need for a public announcement; or

    3. (c)

      the candidate not applying for the position in the first place because it would reveal to the candidate’s current employer the proposed move too soon.

  3. (3)

    The FCA may consider that it needs to see the information in a reference before it reaches a decision. If so, it may formally ask for that information and extend the time period in which it has to make its decision until it gets the reference. SUP 10C.10.28G gives additional details about requests for further information and the effect they have on the period of time the FCA has to make a decision about an application.

  4. (4)

    Full scope regulatory reference firms are reminded that the Act itself requires a firm to be satisfied that a candidate is fit and proper before it makes an application for approval (see SUP 10C.10.14G for more detail). SYSC 22.7.11G(2) does not affect that obligation.