SYSC 22.7 Getting references: additional rules and guidance for SMCR firms

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 firm3 appointing someone to a position that requires a reference may have to get the employee’s help in identifying their previous employers.

1. (1)

   SYSC 22.2.1R (Obligation of an SMCR firm2 to try to obtain a reference) applies even if the ex-employer is not a firm.

2. (2)

   A firm3 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.

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1. (1)

   SYSC 22.2.1R (Obligation to obtain references3) applies even if the employer has already got a reference for the employee. For example:

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   1. (a)

      a firm3 should have a reference whenever it renews the certificate of a certification employee; and

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   2. (b)

      changing jobs within the same firm3 may require a reference.

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2. (2)

   However, the firm3 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).

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If a3 firm (A):

1. (1)

   appoints someone (P) to a certification function2 position;

2. (2)

   obtains a reference from an ex-employer; and

3. (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. (1)

   If a3 firm (A):

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   1. (a)

      appoints someone (P) to a certification function2 or an approved person position;

   2. (b)

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

   3. (c)

      later wishes to:

      1. (i)

         appoint P to another certification function2 or approved person position; or

      2. (ii)

         keep P in the same certification function2 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

      3. (iii)

         move P from a certification function2 to an approved person position or vice versa;

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

1. (2)

   A may decide that it is not necessary to ask B to reissue or amend its reference. For example, A may decide that:

   1. (a)

      the existing reference already covers everything necessary; or

   2. (b)

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

If a3 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. (1)

   Where a3 firm needs to fill a vacancy for a certification function2 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.

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2. (2)

   In such cases, the SMCR firm2 should take up the reference as soon as reasonably possible.

3. (3)

   If a reference obtained later raises concerns about the person’s fitness and propriety, the 3firm should revisit its decision to issue the person with a certificate.

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1. (1)

   Although this chapter (see SYSC 22.2.3R) only requires a3 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.

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2. (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:

   1. (a)

      breaching the confidentiality of a wider commercial or corporate transaction;

   2. (b)

      prematurely triggering the need for a public announcement; or

   3. (c)

      the candidate not applying for the position in the first place because it would reveal to the candidate’s current employer the proposed move too soon.

3. (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.

4. (4)

   Firms3 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.

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