What are Regulatory references under SMCR?

Firms must establish, implement and maintain policies and procedures that are adequate for the purposes of comply with the SM&CR regulatory references requirements.[1]

Regulatory references are a key input into the fit and proper assessment process.  They are relevant for all external recruitment and for some internal promotions.

At a high level, these requirements oblige firms to take “reasonable steps” to obtain regulatory references covering the previous six years of employment with respect to all Senior Managers, all certification staff[2], and non-executive directors who are not senior managers (“Non-approved NEDs”).[3]  The requirements also apply to Appointed Representatives of the firm, as well as to the firm itself.[4]  The FCA believes that it is the responsibility of each individual firm to determine what “reasonable steps” means in this context.[5]

Regulatory reference information is to be shared using a standard template, which is found in SYSC 22, Annex 1.

Firms which are subject to the SM&CR must try to obtain a reference from a previous employer even if the previous employer was not an FCA regulated firm.[6]

[1] SYSC 22.8.1R

[2] SYSC 22.2.1R(1)(b)

[3] SYSC 22.2.1R

[4] SYSC 22.8.3R

[5] PS16/22 “Strengthening accountability in banking and insurance: regulatory reference final rules”, page 9

[6] SYSC 22.7.4G

Everything you wanted to know about SM&CR - but were afraid to ask!

New to SMCR – or need a hand getting up to speed withj SMCR compliance? This guide will help you understand and implement every part of the SM&CR. You’ll learn, amongst other things:

  • How firms are classified.
  • How to identify Certification Staff.
  • The Responsibilities of a Senior Manager.
  • Conduct Rules & how they apply to your role.

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