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New regulatory references rules for banks and insurers

New regulatory references rules for banks and insurers

New rules on regulatory references within banks, PRA designated investment firms and large insurers/reinsurers came into force on 7 March 2017.   The rules apply to those undertaking senior management functions and significant harm functions.

Senior managers will continue to be approved by the PRA/FCA but the regulators will no longer be involved in the assessment of a certified person's fitness and propriety.  Firms must:

  • obtain satisfactory references covering the candidate's employment history over the prior 6 years;
  • provide a reference, to disclose certain formation and to use a mandatory form;
  • update any references given in the last 6 years,if the firm becomes aware of relevant information that means the reference is no longer accurate.

The changes mean that the old Form C (Notice of ceasing to perform controlled functions) and Form D (Notification of changes in personal information or application details) will now only be relevant to those more junior staff who are approved persons.

The FCA plans to consult on extending the senior managers and certification regime to all authorised firms in due course.