Recruitment: financial services
NOTE: The new Senior Managers Regime (SMR) and Certification Regime (CR) apply to all UK-incorporated banks, building societies, credit unions and PRA-regulated investment banks (s.71A Financial Services and Markets Act 2000) and replace the Approved Persons Regime for individuals working within those firms. However, all FCA-authorised firms that are not subject to the SMR and CR currently remain subject to the Approved Persons Regime. This includes asset managers, brokers and consumer credit firms.
- Recruitment for employees in regulated firms should follow the usual employment law principles in addition to the requirements of the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). (See General position for regulated firms)
- The Approved Persons Regime continues to apply to some parts of the financial services industry such as asset managers, brokers and consumer credit firms. Individuals recruited to perform controlled functions in these firms must be approved in advance by the FCA as approved persons. (See Recruitment of approved persons)
- The SMR requires senior managers recruited to carry out senior management functions (SMFs) in relevant firms to be pre-approved by the PRA or FCA. (See Recruitment of persons to perform senior management functions)
- Under the CR, relevant firms are responsible for certifying the fitness and propriety of staff performing certification functions. (See Recruitment of persons to perform certification functions)
- There is a prescribed application process for approved person status and approval to perform an SMF. (See Recruitment of approved persons and persons to perform functions under the Senior Managers and Certification Regimes: procedural considerations)