Providing references: financial services

Updating authors: Nick Thorpe
Consultant editor: Michael Sholem, Macfarlanes

Summary

• General employment law principles apply in respect of references for employees at firms regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). (See General requirements)
• There are specific rules for providing references under the Senior Managers Regime (SMR) and the Certification Regime (CR). (See References under the Senior Management and Certification Regimes)
• Firms are required to take reasonable steps to obtain references covering an individual's previous six years of employment, for individuals who are appointed to either a senior management function under the SMR or a certification function under the CR. (See Reasonable steps)
• When supplying a reference under the SMR or CR, a previous regulatory employer is required to disclose all relevant information of which it is aware. (See Disclosure of relevant information)
• Under the SMR and CR, firms have an obligation to update any regulatory reference given to a regulated firm on or after 7 March 2017, if new information comes to light that calls into question that individual's fitness and propriety. (See Updating regulatory references)
• Employers must submit certain information about senior individuals (such as senior managers and certified staff) to the FCA online directory. (See The directory)
• Employers should consider either refusing to include a standard reference within a COT3 or settlement agreement or including a clause in the agreement limiting a standard reference to a non-regulated role. (See Settlement agreements)