Chapter 22 Regulatory references - FCA Handbook

1 Senior Management Arrangements, Systems and ControChapter 22 Regulatory referencesSYSC 22 : Regulatory referencesSection : Release 22l Aug 22 Chapter applies to all SMCR SYSC TP applies this Chapter to certain claims management firms thatare not SMCR Chapter is not limited to regulated activities or other specific types scope and overseas is no territorial limitation on the application of this Chapter , subject ton SYSC effect of n SYSC is that the obligation to provide a reference canapply even if the employee worked in an overseas office of the employer.

2 [deleted]For an overseas firm, n SYSC (Obligation to give references ) onlyapplies if the current or former employee in question (defined as P inn SYSC ) is or was an employee of its branch in the United Kingdomand only relates to their activities as such.(1) In order to decide whether someone is an employee of a branch, theGlossary definition of employee is applied to the branch as if thebranch and the firm of which it forms part were separate firms.(2) For the purpose of (1), paragraph (4A)(c) of the definition ofemployee (someone employed elsewhere in the group) does 22 : Regulatory referencesSection : Getting, giving and updatingreferences: the main Release 22l Aug 22 , giving and updatingreferences: the main rulesObligation to obtain (1) If a firm (A) is considering:(a) permitting or appointing someone (P) to perform a controlledfunction;(b) issuing a certificate under the certification regime for P.

3 Or(ba) appointing a board director;(as explained in more detail in rows (A) and (B) of the table inn SYSC ), A must take reasonable steps to obtain appropriatereferences from:(c) P s current employer; and(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 timein column two of the applicable row in the table in n SYSC If Adoes not obtain it within that time it must take reasonable steps toobtain it as soon as possible thereafter.

4 (3) A must in particular request:(a) the information in n SYSC (1) to (3); and(b) (if P s current or previous employer is also an SMCR firm) theinformation in n SYSC (4) (questions (A) to (F) of Part One ofn SYSC 22 Annex 1R).(4) When deciding what information to request under (1), A must haveregard to the factors in n SYSC (5) (Factors set out inn SYSC 22 Annex 2R).Obligation to give (1) A firm (B) must provide a reference to another firm (A) as soon asreasonably practicable if:(a) A is considering:(i) permitting or appointing someone (P) to perform acontrolled function; or(ii) issuing a certificate under the certification regime for P; or(iii) appointing P to another position in the table inn SYSC.

5 SYSC 22 : Regulatory referencesSection : Getting, giving and updatingreferences: the main Release 22l Aug 22/4(as explained in more detail in the table in n SYSC );(b) A makes a request, for a reference or other information inrespect of P from B, in B s capacity as P s current or formeremployer;(c) B:(i) is P s current employer; or(ii) has been P s employer at any time in the six year periodpreceding 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 isaware that B reasonably considers to be relevant to A s assessment ofwhether P is fit and proper.

6 (3) B is only required to disclose under (1) and (2) something thatoccurred 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 Bgives the reference; or(c) (in the case of serious misconduct) at any time.[Note: See n SYSC and n SYSC for guidance on themeaning of serious misconduct](4) B must in addition disclose the information in questions (A) to (F) ofPart One of n SYSC 22 Annex 1R (Template for Regulatory referencesgiven by SMCR firms and disclosure requirements).

7 (5) When deciding what information to give to A under (1) to (3), B musthave regard to the factors in n SYSC 22 Annex 2R (Factors to take intoaccount when asking for and giving Regulatory references ).Table: What positions need a referenceWhen to obtainPositionreferenceComments(A) Permitting or ap-One month before thepointing someone toend of the applicationperform an FCA con-periodtrolled function or aWhere a request for aPRA controlledreference :(a) the firm requestingthe reference;(b) the employer givingthe reference; or(c) any other person.

8 SYSC 22 : Regulatory referencesSection : Getting, giving and updatingreferences: the main Release 22l Aug 22/5 When to obtainPositionreferenceCommentsto make a mandatorydisclosure prior to P dis-closing to its currentemployer that such ap-plication has beenmade, the date is theend of the applicationperiod.(B) Issuing a certificateBefore the certificate isThis includes renewingunder section 63F ofissuedan existing Act (Certificationof employees by au-thorised persons).(C) Appointing some-Not applicableSYSC (obligationone to any of the fol-to obtain a reference)lowing positions (as de-does not apply to afined in the PRAfirm appointing some-Rulebook):one to the position incolumn (1).

9 (a) a notified non-exec-utive director;However SYSC apply to a firm(b) a credit union non-asked to give a refer-executive director; orence to a firm ap-pointing someone to(c) a key functionthe position in columnholder.(1).(D) A firm appointingBefore appointmentOnly applies where thesomeone to be a non-appointment is by aSMF board director sub-UK SMCR firm that is:ject to competence re-(a) a core SMCR firm;quirements of (b) an enhanced scopeSMCR 1: Mandatory disclosure means an obligation in any applicable laws,regulations or rules to declare or disclose information to the 2: P refers to the employee or ex-employee about whom the refer-ence is given as defined in more detail in SYSC and SYSC 3: The application period means the period for consideration referredto in section 61 of the Act (Determination of application).

10 Obligation to revise references : The main at any time:(1) a firm (B) has given a reference under n SYSC 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 hadbeen aware of them when giving that reference, this chapterwould have required B to draft the reference differently; orSYSC 22 : Regulatory referencesSection : Getting, giving and updatingreferences: the main Release 22l Aug 22/6(b) the following applies:(i) B has since giving the reference reached conclusions of thetype described in question (E) of Part One ofn SYSC 22 Annex 1R or taken disciplinary action of the typedescribed in question (F) of Part One of n SYSC 22 Annex 1R.