Chapter 22 Regulatory references

Senior Management Arrangements, Systems and Contro

Chapter 22

Regulatory references

SYSC 22 : Regulatory references Section 22.1 : Application

R22.1.1

G22.1.1A

G22.1.2

R22.1.3

G22.1.4

R22.1.5

R22.1.6

R22.1.7

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/2

22.1 Application

General application

.....................................................................................................

This chapter applies to all SMCR firms.

■ SYSC TP 8.5.1R applies this chapter to certain claims management firms that

are not SMCR firms.

Activities covered

.....................................................................................................

This chapter is not limited to regulated activities or other specific types of

activities.

Territorial scope and overseas firms

.....................................................................................................

There is no territorial limitation on the application of this chapter, subject to

■ SYSC 22.1.6R.

One effect of ■ SYSC 22.1.3R is that the obligation to provide a reference can

apply even if the employee worked in an overseas office of the employer.

[deleted]

For an overseas firm, ■ SYSC 22.2.2R (Obligation to give references) only

applies if the current or former employee in question (defined as “P” in

■ SYSC 22.2.2R) is or was an employee of its branch in the United Kingdom

and only relates to their activities as such.

(1) In order to decide whether someone is an employee of a branch, the

Glossary definition of employee is applied to the branch as if the

branch and the firm of which it forms part were separate firms.

(2) For the purpose of (1), paragraph (4A)(c) of the definition of

employee (someone employed elsewhere in the group) does not

apply.

SYSC 22 : Regulatory references Section 22.2 : Getting, giving and updating

references: the main rules

R22.2.1

R22.2.2

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/3

22.2 Getting, giving and updating

references: the main rules

Obligation to obtain references

.....................................................................................................

(1) If a firm (A) is considering:

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

function;

(b) issuing a certificate under the certification regime for P; or

(ba) appointing a board director;

(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:

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

(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. If A

does not obtain it within that time it must take reasonable steps to

obtain it as soon as possible thereafter.

(3) A must in particular request:

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

(b) (if P’s current or previous employer is also an SMCR firm) the

information in ■ SYSC 22.2.2R(4) (questions (A) to (F) of Part One of

■ SYSC 22 Annex 1R).

(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

.....................................................................................................

(1) A firm (B) must provide a reference to another firm (A) as soon as

reasonably practicable if:

(a) A is considering:

(i) permitting or appointing someone (P) to perform a

controlled function; or

(ii) issuing a certificate under the certification regime for P; or

(iii) appointing P to another position in the table in

■ SYSC 22.2.3R;

SYSC 22 : Regulatory references Section 22.2 : Getting, giving and updating

references: the main rules

R22.2.3

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/4

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

(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;

(i) is P’s current employer; or

(ii) has been P’s employer at any time in the six year period

preceding the request in (1)(b); and

(d) A indicates to B the purpose of the request.

(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) B is only required to disclose under (1) and (2) something that

occurred or existed:

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

(b) between the date of the request for the reference and the date B

gives the reference; or

[Note: See ■ SYSC 22.5.10G and ■ SYSC 22.5.11G for guidance on the

meaning of serious misconduct]

(4) 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 SMCR firms and disclosure requirements).

(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).

Table: What positions need a reference

When to obtain

Position reference Comments

(A) Permitting or ap- One month before the

pointing someone to end of the application

perform an FCA con- period

trolled function or a

Where a request for a

PRA controlled

reference would

function.

require:

(a) the firm requesting

the reference;

(b) the employer giving

the reference; or

SYSC 22 : Regulatory references Section 22.2 : Getting, giving and updating

references: the main rules

R22.2.4

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/5

When to obtain

Position reference Comments

to make a mandatory

disclosure prior to P dis-

closing to its current

employer that such ap-

plication has been

made, the date is the

end of the application

period.

(B) Issuing a certificate Before the certificate is This includes renewing

under section 63F of issued an existing certificate.

the Act (Certification

of employees by au-

thorised persons).

one to any of the fol- to obtain a reference)

lowing positions (as de- does not apply to a

fined in the PRA firm appointing some-

Rulebook): one to the position in

column (1).

(a) a notified non-exec-

utive director; However SYSC 22.2.2R

does apply to a firm

(b) a credit union non-

asked to give a refer-

executive director; or

ence to a firm ap-

pointing someone to

the position in column

holder.

(1).

(D) A firm appointing Before appointment Only applies where the

someone to be a non- appointment is by a

SMF board director sub- UK SMCR firm that is:

ject to competence re-

(a) a core SMCR firm;

quirements of itself.

(b) an enhanced scope

SMCR firm.

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 refer-

ence 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

.....................................................................................................

If at any time:

(1) a 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) B was also an SMCR firm when it gave the reference in (1);

(3) either of the following applies:

(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

SYSC 22 : Regulatory references Section 22.2 : Getting, giving and updating

references: the main rules

R22.2.5

R22.2.6

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/6

(b) the following applies:

(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

(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) 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:

(5) make reasonable inquiries as to the identity of P’s current employer;

and

(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.

B does not need to update A if:

(1) A is no longer a firm;

(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) A is no longer P’s employer; or

(4) despite making reasonable enquiries under ■ SYSC 22.2.4R, B does not

know whether P is still employed by A.

This rule sets out time limits about the obligation to update a reference in

■ SYSC 22.2.4R.

(1) If B still employs P, ■ SYSC 22.2.4R applies throughout the period B

remains employed.

(2) If B no longer employs P, the obligation to update ends six years after

P ceased to be employed by B.

(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]

SYSC 22 : Regulatory references Section 22.2 : Getting, giving and updating

references: the main rules

R22.2.7

R22.2.8

G22.2.9

G22.2.10

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/7

Obligation to revise references: Finding out who the current

employer is

.....................................................................................................

If at any time:

(1) a 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) B asks A whether P is still an employee of A; and

(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.

Sole traders

.....................................................................................................

The obligation in ■ SYSC 22.2.1R (Obligation to obtain references) does not

apply if A and P (as referred to in that rule) are the same person.

An example of ■ SYSC 22.2.8R is this. Say that P works at a firm (B) and leaves

to become a firm and a sole trader. P appoints themselves to perform the

compliance oversight function. P does not need to get a regulatory reference

from B about themselves.

(1) If a firm is appointing someone who was a sole trader to a position

that would normally require a regulatory reference under

■ SYSC 22.2.1R, it does not have to request a reference from the sole

trader themselves. That is because ■ SYSC 22.2.1R only requires a firm

to request a reference from a previous employer and a sole trader is

not their own employer.

(2) An example of (1) is this. Say that P was a firm and a sole trader and

performed the compliance oversight function themselves. P goes to

work for another firm (A). A does not need to request a regulatory

reference from P about P.

SYSC 22 : Regulatory references Section 22.3 : Drafting the reference and the

request for a reference

G22.3.1

G22.3.2

G22.3.3

G22.3.4

G22.3.5

G22.3.6

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/8

22.3 Drafting the reference and the

request for a reference

[deleted]

(1) A firm (A) asking another firm (B) for a reference should give B

sufficient information to let B know that the requirements in this

chapter apply to the reference it is being asked to give and which

requirements apply.

(2) As long as it complies with (1), A does not have to set out specifically

the information this chapter requires it to obtain. This is because B

should include that information even though B is not specifically

asked to include it.

A firm asking for a reference under this chapter from a current or former

employer that is not a firm will normally need to specify what information it

would like.

(1) [deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.4.6G(-1)]

(2) [deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.4.7G]

[deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.4.8G]

SYSC 22 : Regulatory references Section 22.4 : Drafting the reference:

detailed requirements

G22.4.1

R22.4.2

G22.4.3

G22.4.4

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/9

22.4 Drafting the reference: detailed

requirements

Drafting the reference: detailed requirements for SMCR firms

.....................................................................................................

■ SYSC 22 Annex 1R (Template for regulatory references given by SMCR firms

and disclosure requirements) has two purposes:

(1) to set out what information a firm should disclose under

■ SYSC 22.2.2R(4); and

(2) to provide a template that a firm should use when giving a reference

under this chapter.

How to draft the reference

.....................................................................................................

(1) A firm must use the template in Part One of ■ SYSC 22 Annex 1R

(Template for regulatory references given by SMCR firms and

disclosure requirements) when giving a reference under this chapter

to another firm (A).

(2) A firm may make minor changes to the format of the template in

Part One of ■ SYSC 22 Annex 1R when giving a reference under this

chapter, provided that the reference includes all the information

required by ■ SYSC 22 Annex 1R.

(3) This rule applies even if A is not an SMCR firm.

(1) [deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.4.6G(1)]

(2) [deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.4.6G(2)]

(3) [deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.4.6G(3)]

A firm should use the template in ■ SYSC 22 Annex 1R (Template for regulatory

references given by SMCR firms and disclosure requirements) even if the firm

asking for the reference does not specifically ask it to.

SYSC 22 : Regulatory references Section 22.4 : Drafting the reference:

detailed requirements

R22.4.5

G22.4.6

G22.4.7

G22.4.8

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/10

PRA requirements

.....................................................................................................

B may combine in a single reference what the PRA’s rules require and what

this chapter requires.

Inclusion of additional material

.....................................................................................................

(-1) This chapter sets out minimum requirements for a reference. It does

not prevent a firm from including more than is required by this

chapter.

(1) Therefore ■ SYSC 22.4.2R does not stop a firm including matters in the

reference not required by the template in ■ SYSC 22 Annex 1R.

(2) A firm may include the material required by the template and

additional material in the same document.

(3) Any additional material should not alter the scope of any of the

questions in the templates.

If a firm does disclose more than is required by this chapter the reference

should still meet its duties under general law to its former employee and the

recipient (see ■ SYSC 22.5.3G to ■ SYSC 22.5.5G).

Time limits

.....................................................................................................

Nothing in this chapter prevents a firm from disclosing material outside the

time limits under this chapter.

SYSC 22 : Regulatory references Section 22.5 : Giving references: additional

rules and guidance for all firms

R22.5.1

G22.5.2

G22.5.3

G22.5.4

G22.5.5

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/11

22.5 Giving references: additional rules

and guidance for all firms

Verification

.....................................................................................................

This chapter does not require a firm to disclose information that has not

been properly verified.

(1) For example, this chapter does not necessarily require a firm to

include in a reference the fact that an ex-employee left while

disciplinary proceedings were pending or had started. Including such

information is likely to imply that there is cause for concern about

the ex-employee but the firm may not have established that the ex-

employee was actually responsible for misconduct.

(2) However, a firm may include such information in a reference if it

wishes to (see ■ SYSC 22.3.5G).

Accuracy

.....................................................................................................

A firm should, when giving a reference under this chapter, provide as

complete a picture of an employee’s conduct record as possible to new

employers.

Fairness

.....................................................................................................

(1) A firm supplying a reference in accordance with this chapter owes a

duty under the general law to its former employee and the recipient

firm to exercise due skill and care in the preparation of the reference.

(2) The firm may give frank and honest views, but only after taking

reasonable care both as to factual content, and as to the opinions

expressed.

(3) References should be true, accurate, fair and based on documented

fact.

(1) An example of the general duty described in ■ SYSC 22.5.4G is that

fairness will normally require a firm to have given an employee an

opportunity to comment on information in a reference. The firm

might do this through, for example, disciplinary proceedings.

SYSC 22 : Regulatory references Section 22.5 : Giving references: additional

rules and guidance for all firms

G22.5.6

G22.5.7

G22.5.8

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/12

(2) Paragraph (1) does not mean that the firm should provide an

opportunity to comment on the reference itself, as opposed to the

allegations on which it is based.

(3) A firm may have given the employee an opportunity to comment on

allegations that are later included in a reference even though, at the

time that the firm is giving that opportunity, no reference is being

contemplated. That may mean that the firm gives the employee their

opportunity to comment on the allegations some time before the

reference is prepared.

(4) Paragraph (1) does not mean that a firm will be unable to include an

allegation in a reference if it has offered the employee an

opportunity to comment on the allegation but the employee has

unreasonably refused to do so.

(5) Where a firm should have given an employee an opportunity to

comment on an allegation if the allegation is to be included in a

reference, this chapter requires the firm to give the employee that

opportunity rather than merely to leave the allegation out of the

reference.

(6) Paragraph (5) may mean that where the firm has not given its

employee an opportunity to comment on a matter at the time it first

arose, it will have to give the employee the opportunity around the

time that the firm is preparing the reference.

(7) The obligation to give an employee an opportunity to comment does

not mean that there is a wider duty to investigate whether there are

facts that show that there has been a conduct breach (see

■ SYSC 22.5.18G).

(8) This chapter does not require the employee’s views to be included in

the reference. Instead the firm should take those views into account

so far as appropriate when deciding whether something should be

disclosed and how the disclosure is drafted.

Outsourcing

.....................................................................................................

The requirements in this chapter for a firm (B) to give a firm (A) a reference

also apply where A has outsourced the collection of that information to

another (unregulated) third party, where B has been made aware that the

unregulated third party is acting on behalf of A.

Circumstances in which the ex-employee left

.....................................................................................................

The obligation to give a reference for an employee or ex-employee applies

however the employment ended or is going to end. For example, it applies

whether it ended through resignation, redundancy, dismissal or fixed term

work, a secondment or temporary work coming to an end.

Missing or incomplete information

.....................................................................................................

(1) If a firm’s records do not cover the maximum periods contemplated

by ■ SYSC 22.2.2R or ■ SYSC 22 Annex 1R (Template for regulatory

SYSC 22 : Regulatory references Section 22.5 : Giving references: additional

rules and guidance for all firms

G22.5.9

G22.5.10

G22.5.11

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/13

references given by SMCR firms and disclosure requirements), the firm

should note that in the reference.

(2) A firm should not include a warning of the type described in (1) as a

matter of routine. It should only be included if there is a genuine

need to include it.

All relevant information: Calculation of six year period for

disclosure

.....................................................................................................

(1) In general there is a six year limit on what should be disclosed under

■ SYSC 22.2.2R(1) to (3).

(2) Where the matter to be disclosed consists of a single course of

conduct (such as market manipulation) the six year period does not

begin until that course of conduct has come to an end. This means

that individual events that occurred more than six years ago may still

be within the six year limit.

(3) This guidance is also relevant to the six year time limits for updating

references in ■ SYSC 22.2.6R.

All relevant information: Removal of six year period

.....................................................................................................

(1) ■ SYSC 22.2.2R(1) to (3) normally has a six year time limit.

■ SYSC 22.2.2R(3)(c) removes that time limit for serious matters. This

paragraph (■ SYSC 22.5.10G) and ■ SYSC 22.5.11G have guidance about

this. This guidance is also relevant to the time limits for updating

references in ■ SYSC 22.2.6R.

(2) The removal of the time limit does not mean that the time that has

elapsed since the matter occurred is irrelevant. The length of time

that has elapsed is relevant to deciding whether the matter is serious.

In general, the longer ago the matter occurred, the less likely it is still

to be serious for these purposes.

(3) In determining whether something is serious for these purposes, the

key question is how important the information still is for the

requesting firm’s assessment of the employee’s fitness for the function

that they are going to perform.

(4) In considering what is relevant, a firm should, in particular, have

regard to ■ SYSC 22.5.4G (Fairness).

(5) The table in ■ SYSC 22.5.11G provides guidance on some of the factors

which a firm should take into account when determining whether a

matter is serious.

(6) The guidance in this paragraph and in the table in ■ SYSC 22.5.11G is

only designed for the purposes of this chapter. It does not, for

example, apply for the purposes of ■ SUP 15 (Notifications to the FCA),

DEPP or EG.

Table: Examples of factors to take into account when deciding whether old

misconduct is sufficiently serious to disclose

SYSC 22 : Regulatory references Section 22.5 : Giving references: additional

rules and guidance for all firms

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/14

Factors to take into account Comments

(A) Whether P has committed a ser- Individual conduct requirements has

ious breach of individual conduct re- the same meaning as in Part Two of

quirements. SYSC 22 Annex 1R (Template for regu-

latory references given by SMCR

firms and disclosure requirements).

Factors to take into account in decid-

ing whether the breach is serious in-

clude the following.

(1) The extent to which the conduct

was deliberate or reckless.

(2)The extent to which the conduct

was dishonest.

(3)Whether the breaches are fre-

quent or whether they have con-

tinued over a long period of time.

The fact that breaches were fre-

quent or repeated may increase the

likelihood that they should be dis-

closed since the breaches may show

a pattern of non-compliance.

(4)The extent of loss, or risk of loss,

caused to existing, past or potential

investors, depositors, policyholders

or other counterparties or

customers.

(5)The reasons for the breach. For

example, where the breach was

caused by lack of experience which

has been remedied by training or

further experience, it is less likely

that the breach will still be relevant.

(B) Whether the conduct caused B (1) The factors in (A) are relevant to

to breach requirements of the regu- whether P’s conduct was serious.

latory system or P was concerned in

(2)The seriousness of the breach by

a contravention of such a require-

B is relevant. The factors in (A) are

ment by B and, in each case,

also relevant to this.

whether P’s conduct was itself

serious.

(3)A breach by B of certain require-

ments is always likely to be serious

under (2). Breach of the threshold

conditions is an example. However

that does not mean that P’s involve-

ment will automatically be serious.

honesty (whether or not also invol- but it is not automatically decisive

ving a criminal act). in every case. For instance, a small

one-off case of dishonesty many ye-

ars ago may not be sufficiently ser-

ious to require disclosure.

(D) Whether the conduct would

have resulted in B’s dismissing P,

had P still been working for B,

based on B's disciplinary policies

and the requirements of the law

about unfair dismissal.

SYSC 22 : Regulatory references Section 22.5 : Giving references: additional

rules and guidance for all firms

G22.5.12

R22.5.13

G22.5.14

G22.5.15

G22.5.16

G22.5.17

G22.5.18

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/15

Factors to take into account Comments

(E) Whether the conduct was such

that, if B was considering P for a

role today and became aware of

the historical conduct, B would not

employ P today notwithstanding

the time that has passed.

Note 1: P refers to the employee about whom the reference is being

written.

Note 2: B refers to the firm giving the reference.

(1) [deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.8.10G(2)]

(2) [deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.8.10G(1)]

Agreements not to disclose information

.....................................................................................................

A firm must not enter into any arrangements or agreements with any person

that limit its ability to disclose information under this chapter.

■ SYSC 22.5.13R covers all types of agreements and arrangements. For

example:

(1) it is not limited to an agreement or arrangement entered into when

the employee leaves;

(2) it applies however the employment ends (see ■ SYSC 22.5.7G); and

(3) it covers a “COT 3” Agreement settled by the Advisory, Conciliation

and Arbitration Service (ACAS).

A firm should not give any undertakings to supress or omit relevant

information in order to secure a negotiated release.

The obligation to supply information to another firm under this chapter will

apply notwithstanding any agreement prohibited by ■ SYSC 22.5.13R.

Time in which to respond to reference requests

.....................................................................................................

The FCA expects that normally a firm should issue a reference under this

chapter within six weeks of being asked to.

Duty to investigate allegations

.....................................................................................................

(1) A firm should, wherever feasible, conclude investigative procedures

before the employee departs.

(2) However, this chapter does not create a duty to investigate alleged

misconduct by an employee or former employee.

SYSC 22 : Regulatory references Section 22.5 : Giving references: additional

rules and guidance for all firms

G22.5.19

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/16

(3) There are several reasons why a firm may find it appropriate to

investigate potential misconduct by an employee or former employee,

including:

(a) assessing the actual and potential damage resulting from

misconduct;

(b) identifying other individuals potentially culpable or accountable

for the breach;

where the misconduct occurred took reasonable steps to prevent

or stop it; and

(d) (where the employee has remuneration susceptible to malus or

clawback) enabling it to consider whether any adjustments are

justified.

Criminal record checks

.....................................................................................................

A firm giving a reference need not include information from a criminal

records check it has carried out under Part V of the Police Act 1997

(Certificates of Criminal Records, &). The recruiting firm should carry out a

criminal records check itself if necessary. The main FCA Handbook

requirements on a recruiting firm to carry out a criminal records check are:

(1) ■ SUP 10C.10.16R a firm should carry out such a check when appointing

an SMF manager); and

(2) ■ SYSC 23.4 (Criminal record checks for certain directors).

SYSC 22 : Regulatory references Section 22.6 : Giving and updating

references: additional rules and guidance

G22.6.1

G22.6.2

G22.6.3

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/17

22.6 Giving and updating references:

additional rules and guidance

Omitting or supplementing mandatory disclosures

.....................................................................................................

(1) A firm may have concluded that an employee is unfit or has breached

COCON or APER (as described in questions (E) to (F) of Part One of

■ SYSC 22 Annex 1R (Template for regulatory references given by SMCR

firms and disclosure requirements)). The firm may later become aware

of facts or matters causing it to revise its original conclusions.

(2) If so, the firm may decide not to disclose in a reference its conclusion

or may qualify its conclusion with supplementary information.

(1) A firm may have concluded that an employee is unfit or has breached

COCON or APER (as described in questions (E) to (F) of Part One of

■ SYSC 22 Annex 1R (Template for regulatory references given by SMCR

firms and disclosure requirements)). However the firm may consider

that the disclosure is incomplete without including mitigating

circumstances.

(2) For example, if the firm is reporting a breach of COCON it may

consider that the breach is very uncharacteristic of the employee and

that they have had an exemplary record since then. In that case, the

firm should include those views.

Requirement to consider whether there has been a conduct

breach

.....................................................................................................

(1) If a firm has taken disciplinary action of the type referred to in

question (F) in Part One of ■ SYSC 22 Annex 1R (Template for regulatory

references given by SMCR firms and disclosure requirements) against

an employee and is asked to give a reference about that employee,

the firm should (if it has not already done so) consider whether the

basis on which it took that action amounts to a breach of any

individual conduct requirements covered by question (F).

(2) If the firm decides that the basis on which it took that action does

amount to a breach of those requirements, it should include that

disciplinary action in the reference under question (F).

(3) Paragraph (2) applies even if the grounds of the disciplinary action

did not include such a breach of individual conduct requirements.

(4) The requirement in (1) is disapplied for disciplinary action taken

before certain specified dates, where a firm’s records do not record

SYSC 22 : Regulatory references Section 22.6 : Giving and updating

references: additional rules and guidance

G22.6.4

G22.6.5

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/18

whether previous conduct subject to disciplinary action amounted to

a breach. The date differs between different types of firms. ■ SYSC TP 5

and ■ SYSC TP 7 set out those specified dates and other details.

(5) The obligation to consider whether there was a conduct breach does

not mean that there is a wider duty to investigate whether there are

facts that show that there has been a conduct breach (see

■ SYSC 22.5.18G).

All relevant information: Interaction with mandatory

disclosures

.....................................................................................................

(1) ■ SYSC 22.2.2R(1) to (3) may require a firm to disclose information that

goes beyond the mandatory minimum information in Part One of

■ SYSC 22 Annex 1R (Template for regulatory references given by SMCR

firms and disclosure requirements).

(2) This may mean, for instance, that a firm should in some cases disclose

a conclusion that an employee or former employee has breached

COCON or APER where that conclusion was reached outside the time

limits in Part One of ■ SYSC 22 Annex 1R.

Updating references fairly

.....................................................................................................

(1) ■ SYSC 22.5.1R to ■ SYSC 22.5.5G (Verification, accuracy and fairness)

also apply to updating a reference under ■ SYSC 22.2.4R.

(2) Therefore fairness may require a firm to have given an employee an

opportunity to comment on an allegation if it is included in an

update to a reference.

SYSC 22 : Regulatory references Section 22.7 : Getting references: additional

rules and guidance for SMCR firms

R22.7.1

G22.7.2

G22.7.3

G22.7.4

G22.7.5

G22.7.6

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/19

22.7 Getting references: additional

rules and guidance for SMCR firms

(1) [deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.8A.1R]

[deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.8A.2G]

Who should be asked to give a reference

.....................................................................................................

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 firm appointing someone to a position that requires a reference

may have to get the employee’s help in identifying their previous employers.

(1) ■ SYSC 22.2.1R (Obligation to obtain a reference) applies even if the

ex-employer is not a firm.

(2) A 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

.....................................................................................................

(1) ■ SYSC 22.2.1R (Obligation to obtain references) applies even if the

employer has already got a reference for the employee. For example:

(a) a firm should have a reference whenever it renews the certificate

of a certification employee; and

(b) changing jobs within the same firm may require a reference.

(2) However, the 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).

If a firm (A):

(1) appoints someone (P) to a certification function position;

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

SYSC 22 : Regulatory references Section 22.7 : Getting references: additional

rules and guidance for SMCR firms

G22.7.7

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/20

(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 27.2.15G (major changes in role).

(1) If a firm (A):

(a) appoints someone (P) to a certification function or an approved

person position;

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

(i) appoint P to another certification function or approved

person position; or

(ii) keep P in the same certification function but make a change

in P’s role of the type described in ■ SYSC 27.2.15G (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

(iii) move P from a certification function to an approved person

position or vice versa;

SYSC 22 : Regulatory references Section 22.7 : Getting references: additional

rules and guidance for SMCR firms

G22.7.8

G22.7.9

G22.7.10

G22.7.11

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/21

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

(2) A may decide that it is not necessary to ask B to reissue or amend its

reference. For example, A may decide that:

(a) the existing reference already covers everything necessary; or

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

[deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.8A.3G]

When references are to be obtained

.....................................................................................................

If a 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.

(1) Where a firm needs to fill a vacancy for a certification function which

could not have reasonably been foreseen, the FCA recognises that it

may not be reasonable to expect the firm to obtain references prior

to issuing a certificate.

(2) In such cases, the SMCR firm should take up the reference as soon as

reasonably possible.

(3) If a reference obtained later raises concerns about the person’s fitness

and propriety, the firm should revisit its decision to issue the person

with a certificate.

(1) Although this chapter (see ■ SYSC 22.2.3R) only requires a 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) 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:

(a) breaching the confidentiality of a wider commercial or corporate

transaction;

(b) prematurely triggering the need for a public announcement; or

because it would reveal to the candidate’s current employer the

proposed move too soon.

(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.

SYSC 22 : Regulatory references Section 22.7 : Getting references: additional

rules and guidance for SMCR firms

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/22

(4) 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.

SYSC 22 : Regulatory references Section 22.8 : Policies and appointed

representatives

R22.8.1

G22.8.2

R22.8.3

R22.8.4

R22.8.4A

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/23

22.8 Policies and appointed

representatives

Policies and procedures

.....................................................................................................

A firm must establish, implement and maintain policies and procedures that

are adequate for the purpose of complying with the obligations in this

chapter.

(1) ■ SYSC 22.8.1R does not require a firm to create or keep records that

are not required under ■ SYSC 22.9.1R (General record keeping rules)

or another rule.

(2) (1) applies to a firm whether or not ■ SYSC 22.9.1R applies to it.

Appointed representatives

.....................................................................................................

This chapter applies to a firm’s appointed representatives as well as to the

firm.

When ■ SYSC 22.8.3R applies to an SMCR firm, the requirements of this

chapter for firms that are not SMCR firms apply in place of the requirements

that only apply to SMCR firms. In particular, the following requirements do

not apply in relation to an appointed representative:

(1) ■ SYSC 22.2.1R (Obligation to obtain references);

(2) ■ SYSC 22.2.2R(4) (Obligation to give references);

(3) ■ SYSC 22.2.4R to ■ SYSC 22.2.6R (Obligation to revise references);

(4) ■ SYSC 22.4.2R (How to draft the reference);

(5) ■ SYSC 22.8A.1R (Intra-group transfers); and

(6) ■ SYSC 22.9.1R (General record keeping rules).

(1) The approved person’s authorised approved person employer is

responsible for compliance with ■ SYSC 22.8.3R in the case of a

requirement:

(a) to give a reference about an approved person whose approval is

under ■ SUP 10A (FCA Approved Persons in Appointed

Representatives); and

SYSC 22 : Regulatory references Section 22.8 : Policies and appointed

representatives

G22.8.5

G22.8.5A

G22.8.6

G22.8.6A

G22.8.7

G22.8.8

G22.8.9

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/24

(b) [deleted]

(2) In any other case, each principal of the appointed representative in

question is responsible for compliance with ■ SYSC 22.8.3R.

(3) If another principal of the appointed representative has accepted

responsibility for the obligation in ■ SYSC 22.8.3R, that principal is

responsible in place of the other firms in (1) or (2).

One effect of ■ SYSC 22.8.4R is that when an appointed representative

appoints an approved person under ■ SUP 10A (FCA Approved Persons in

Appointed Representatives) there is no requirement for the appointed

representative or its principal to request a reference.

This chapter does not apply in relation to an appointed representative of a

firm that is not an SMCR firm.

(1) A firm should ensure that its appointed representative gives a

reference when another firm (or its appointed representative) asks

that appointed representative to give a reference in accordance with

this chapter.

(2) A firm is not responsible for its appointed representative’s giving

references if another principal has accepted responsibility for this.

(3) The appointed representative need not give the reference using the

template in ■ SYSC 22 Annex 1 (Template for regulatory references

given by SMCR firms and disclosure requirements).

If an appointed representative asks a firm for a reference, the firm should

give one. The requirements of this chapter apply to the firm in the same way

as they would if the appointed representative were a firm.

[deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.8A.4G]

[deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.8A.5G]

[deleted] [Editor’s note: The text of this provision has been moved to

■ SYSC 22.8A.6G]

SYSC 22 : Regulatory references Section 22.8 : Policies and appointed

representatives

G22.8.10

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/25

(1) A firm should try to ensure that its appointed representative

considers whether it needs to disclose a breach of individual conduct

requirements (as defined in Part Two of SYSC 22 Annex 1R (Template

for regulatory references given by SMCR firms and disclosure

requirements)) when giving a reference under this chapter.

(2) Therefore an example of information that may be relevant under

■ SYSC 22.2.2R(1) to ■ (3) is the fact that the employee has breached a

requirement in APER, not just a requirement in COCON.

SYSC 22 : Regulatory references Section 22.8A : Groups and outsourcing

R22.8A.1

G22.8A.2

G22.8A.3

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/26

22.8A Groups and outsourcing

Intra-group transfers

.....................................................................................................

(1) This rule applies when:

(a) a firm (A) would otherwise have to ask another person (B) for a

reference under ■ SYSC 22.2.1R; and

(b) A and B are in the same group.

(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) 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) 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.

(1) ■ SYSC 22.8A.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) 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.

If:

(1) a firm (A) appoints someone (P) to a certification function or

approved person position;

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

(3) later P transfers to a certification function position or an approved

person position with an SMCR firm in A’s group (C);

SYSC 22 : Regulatory references Section 22.8A : Groups and outsourcing

G22.8A.4

G22.8A.5

G22.8A.6

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/27

(4) B’s reference is:

(a) addressed to all firms in A’s group; or

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

(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.

Getting and giving a reference where the employee has worked

in a group or on secondment

.....................................................................................................

If:

(1) a firm (A) is thinking of employing someone (P);

(2) P is employed by a group services company (D) that is not a firm;

(3) P (in their capacity as an employee of D) performs a function or

service for a firm (B) in the same group as D such that P is also an

employee of B; and

(4) A intends to appoint (P) to a position that entitles A to obtain a

reference from B;

then:

(5) A should ask both B and D for a reference;

(6) B is obliged to give the reference if A asks it to;

(7) B should ask D to provide it with the information needed to provide

a reference in accordance with this chapter;

(8) D may give a reference but (as it is not a firm) it is not obliged to;

and

(9) D and B may give a single joint reference.

■ SYSC 22.8A.4G also applies where:

(1) D is not in the same group but has seconded P to B; and

(2) P (in their capacity as an employee of D) performed any function or

services for B such that P was also an employee of B.

If:

(1) a firm (A) is thinking of appointing someone (P) to a position that

entitles A to obtain a reference from another firm (B); and

(2) P was an employee of other members of B’s group as well as of B;

SYSC 22 : Regulatory references Section 22.8A : Groups and outsourcing

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/28

then:

(3) A should ask all the group members that employed P for a reference;

(4) B should give a reference if A asks it to;

(5) P’s employers in that group (including any that are not firms) may

give a single joint reference; and

(6) if the reference is being provided on a consolidated group basis, it

should be clear what information is relevant to which employer

within the group.

SYSC 22 : Regulatory references Section 22.9 : Records and transitionals

R22.9.1

G22.9.2

R22.9.3

G22.9.4

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22/29

22.9 Records and transitionals

General record keeping rules

.....................................................................................................

(1) A firm must arrange for orderly records to be created and kept that

are sufficient to enable it to comply with the requirements of this

chapter.

(2) This rule only applies to records in relation to the following questions

in Part One of ■ SYSC 22 Annex 1R (Template for regulatory references

given by SMCR firms and disclosure requirements):

(a) question (E) (fit and proper); and

(b) question (F) (disciplinary action).

Time limit for records to be kept

.....................................................................................................

■ SYSC 22.9.1R does not have an express time limit for which a firm should

retain the records as its effect is that those time limits are the same as the

time limits in ■ SYSC 22 Annex 1R (Template for regulatory references given by

SMCR firms and disclosure requirements).

Reduction in disclosure obligations where there are limited

record keeping requirements

.....................................................................................................

A firm does not breach the requirements of this chapter by failing to include

information in a reference that it would otherwise have to include if:

(1) the reason for the omission is that the firm does not have the

necessary records; and

(2) neither ■ SYSC 22.9.1R nor any other requirement of or under the

regulatory system requires the firm to have those records.

If a firm is asked to give a reference in circumstances where the record

keeping requirements in ■ SYSC 22.9.1R do not apply:

(1) it is still required to give the reference;

(2) it should give the reference based on the records it does have; and

(3) it will not breach the requirements of this chapter by failing to

include information in a reference if the reason for this is that it does

not have the necessary records, as long as it is not required to have

those records by some other requirement in the Handbook outside

SYSC 22 : Regulatory references Section 22.9 : Records and transitionals

G22.9.5

R22.9.6

G22.9.7

G22.9.8

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22/30

this chapter or some other requirement of or under the regulatory

system.

Effect of previous record keeping requirements

.....................................................................................................

(1) ■ SYSC 22.9.1R applies to keeping records created before the date this

chapter came into force as well as ones created afterwards.

(2) A firm does not breach the requirements of this chapter by failing to

include something in a reference or by failing to have records

because it destroyed the relevant records before the date this chapter

came into force in accordance with the record keeping requirements

applicable to it at the time of destruction.

(3) (1) also applies to records created before this chapter (or the relevant

provision of this chapter) first applied to the firm.

(4) (2) also applies if the firm destroyed the records before this chapter

(or the relevant provision of this chapter) first applied to it.

Transitionals

.....................................................................................................

If:

(1) a firm (A) asks a person (B) who is not an SMCR firm for a reference;

(2) B then becomes an SMCR firm; and

(3) B gives the reference after it becomes an SMCR firm;

the requirements in this chapter apply to B when giving the reference.

If a firm gives a reference after it becomes an SMCR firm, the requirements

of this chapter apply even if the matters covered by the reference occurred

before then.

■ SYSC 22.2.4R (Obligation to revise references) does not apply to a reference

that a firm gave before it became an SMCR firm.

SYSC 22 : Regulatory references Annex 1

Template for regulatory references given by SMCR firms and disclosure

requirements

Part One: Form of Template

Guide to using this template:

Each question must be answered. Where there is nothing to disclose, this should be confirmed by

ticking the “No” box for the relevant question.

In this template:

•“we” / “our firm” refers to the firm or firms giving the reference (as set out in either 1A or 1B be-

low) ;

•“individual” refers to the subject of the reference (as set out in 2 below); and

•“your” refers to the firm requesting the reference (as set out in 3 below).

Information requested Response

1A Name, contact details and firm

reference number of firm provid-

ing reference; or

1B Names, contact details and firm

reference numbers (where ap-

plicable) of group firms provid-

ing a joint reference

2 Individual’s name (i.e. the sub-

ject of the reference)

3 Name, contact details and firm

reference number of firm re-

questing the reference

4 Date of request for reference

5 Date of reference

The answers to Questions A to F cover the period beginning six years before the date of your re-

quest for a reference and ending on the date of this reference

Question A

Has the individual:

(1) performed a certification function for our firm; or

(2) been an approved person for our firm.

Answer:

Yes

Question B:

Has the individual performed one or more of the following roles in relation to our firm:

(1) notified non-executive director;

(2) credit union non-executive director;

(3) key function holder (other than a controlled function); or

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22 Annex 1/1

SYSC 22 : Regulatory references Annex 1

The answers to Questions A to F cover the period beginning six years before the date of your re-

quest for a reference and ending on the date of this reference

(4) board director.

Answer:

Yes

Question C:

If we have answered ‘yes’ to either Question A or B above, we set out the details of each position

held below, including:

(1) what the controlled function, certification function or key function holder role is or

was;

(2) (in the case of a controlled function) whether the approval is or was subject to a con-

dition, suspension, limitation, restriction or time limit;

(3) whether any potential FCA governing function is or was included in a PRA controlled

function; and

(4) the dates during which the individual held the position.

Answer:

Question D:

Has the individual performed a role for our firm other than the roles referred to in Questions A and

B above:

Answer:

Yes

If ‘yes’, we have provided summary details of the other role(s), e.g. job title, department and busi-

ness unit, below.

Question E:

Have we concluded that the individual was not fit and proper to perform a function:

Answer:

Yes

If ‘yes’ and associated disciplinary action was taken as a result, please refer to Question F below.

If ‘yes’, and no associated disciplinary action was taken as a result, we have set out below the facts

which led to our conclusion.

Question F:

We have taken disciplinary action against the individual that:

(1) relates to an action, failure to act, or circumstances, that amounts to a breach of any

individual conduct requirements that:

(a) apply or applied to the individual; or

(b) (if the individual is or was a key function holder, a notified non-execut-

ive director or a credit union non-executive director for your firm) the indi-

vidual is or was required to observe under PRA rules (including if applic-

able, PRA rules in force before 7 March 2016); or

(2) relates to the individual not being fit and proper to perform a function.

Answer:

Yes

■ Release 39 ● Aug 2024www.handbook.fca.org.ukSYSC 22 Annex 1/2

SYSC 22 : Regulatory references Annex 1

The answers to Questions A to F cover the period beginning six years before the date of your re-

quest for a reference and ending on the date of this reference

If ‘yes’, we have provided below a description of the breaches (including dates of when they oc-

curred) and the basis for, and outcome of, the subsequent disciplinary action.

Question G:

Are we aware of any other information that we reasonably consider to be relevant to your assess-

ment of whether the individual is fit and proper? This disclosure is made on the basis that we shall

only disclose something that:

(1) occurred or existed:

(a) in the six years before your request for a reference; or

(b) between the date of your request for the reference and the date of

this reference; or

(2) is serious misconduct.

Answer:

Yes

If ‘yes’, we have provided the relevant information below.

Part Two: Definitions used in Part One

Section One of Part Two of this annex defines terms used in this annex.

Section Two of Part Two of this annex modifies the meaning of certain requirements in Part One and

has material about completing the template.

Section One: Meaning of certain terms and phrases

Defined term or phrase Meaning

B B refers to the employer or ex-employer giving

the reference as defined in more detail in SYSC

22.2.1R and SYSC 22.2.2R.

P 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.

A finding or conclusion by B that P was not fit This means a finding or conclusion by B where:

and proper to perform a function (see questions

(a)B assesses the continuing fitness and propriety

(E) to (F) of the template)

of P as an approved person in accordance with

the requirements of the regulatory system, in-

cluding when carrying out this assessment under

section 63(2A) of the Act (annual assessment of

approved persons by an SMCR firm); or

(b)B assesses the fitness and propriety of P when

B is proposing to issue a certificate under section

63F of the Act (Certification of employees by

SMCR firms) for P.

Paragraph (b) applies whether the certificate is

being issued for the first time or is being

renewed.

Individual conduct requirements Individual conduct requirements mean any of

the following:

(a)COCON;

(b)APER;

■ Release 39 ● Aug 2024 www.handbook.fca.org.uk SYSC 22 Annex 1/3

SYSC 22 : Regulatory references Annex 1

Section One: Meaning of certain terms and phrases

Defined term or phrase Meaning

(c)the PRA’s Individual Conduct Standards or

Senior Manager Conduct Standards in:

(i) Chapter 3 of the Part of the PRA Rulebook

called Insurance – Conduct Standards;

(ii) Chapter 3 of the Part of the PRA Rulebook

called Large Non-Solvency II Firms – Conduct

Standards; and

(iii) Chapter 2 of the Part of the PRA Rulebook

called Non-Solvency II firms - Conduct Standards;

(d)the PRA’s Individual Conduct Rules or Senior

Manager Conduct Rules in:

(i) Chapters 2 and 3 of the Part of the PRA Rule-

book called CRR Firms: Conduct Rules; and

(ii) Chapters 2 and 3 of the Part of the PRA Rule-

book called Non-CRR Firms: Conduct Rules.

Function (as referred to in questions (E) to (F)) A function means a function as an approved per-

son or certification employee.

Disciplinary action Disciplinary action has the same meaning as in

section 64C(2) of the Act (Requirement for au-

thorised persons to notify regulatory of disciplin-

ary action), which is:

(a)the issue of a formal written warning; or

(b)the suspension or dismissal of P; or

(c)the reduction or recovery of any of P’s remu-

neration.

This definition applies even if B is not an SMCR

firm.

Notified non-executive director, credit union These terms have the same meaning as they do

non-executive director and key function holder in the PRA Rulebook.

Certification function, approved person, con- These terms have the same meaning as they do

trolled function and PRA controlled function in the Glossary.

Board director Non-SMF board director subject to competence

requirements, as defined in the Glossary.

Potential FCA governing function Potential FCA governing function means a

function:

(a)that would have been an FCA controlled func-

tion but for:

(i)SUP 10A.11 (Minimising overlap with the PRA

approved persons regime) (when that section

was in force); or

(ii)SUP 10C.9 (Minimising overlap with the PRA ap-

proved persons regime);

(b)but instead is included in a PRA controlled

function under the parts of the PRA Rulebook

listed in SUP 10C.9.6G.

Section Two: Supplementary requirements

Item of template for which supplemental require- Supplemental requirements

ments apply

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SYSC 22 : Regulatory references Annex 1

Section One: Meaning of certain terms and phrases

Defined term or phrase Meaning

Questions (E) and (F) If:

(a)the finding or disciplinary action was reached

or taken by another member of B’s group with

the authority to do so; and

(b)the finding or disciplinary action relates to

conduct by P relating to the carrying on of activ-

ities (whether or not regulated activities) by B;

this question applies to such finding or disciplin-

ary action in the same way as it does to findings

or disciplinary action made or taken by the firm

itself.

Question (F) This question is subject to SYSC TP 5.4.5R and SYSC

TP 7.4.4R (where there is no need to disclose dis-

ciplinary action that took place before certain

dates if the firm’s records do not show whether

there was a breach of individual conduct re-

quirements).

The whole of Part One of this annex The template to be used by a firm in giving a ref-

erence consists of everything in Part One of this

annex except for the “Guide to using this tem-

plate” paragraph.

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SYSC 22 : Regulatory references Annex 2

Factors to take into account when asking for and giving regulatory

references

Matters to take into account Comments

(A)Any outstanding liabilities of that person from

commission payments

(B)Any relevant outstanding or upheld complaint

from an eligible complainant against P

(C)Section 5 of the relevant Form A in SUP 10A An-

nex 4 (Application to perform controlled functions

under approved persons regime) or SUP 10C Annex

3 (Application to perform senior management

functions)

(D)FIT 2 (Main assessment criteria)

(E)The persistency of any life policies sold by P This only applies if SUP 16.8.1G(1) (Persistency re-

ports from insurers) applies to B

Note: 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.

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