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ARTICLE · 25 AUGUST 2023

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Stop The "Rolling Bad Apples": Mandatory Reference Checking In The Banking Sector

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After a year of preparation, the Hong Kong Monetary Authority (HKMA) launched Phase 1 of the Mandatory Reference Checking (MRC) Scheme on 2 May 2023 to tackle "rolling bad apples".

Hong KongFinance and Banking
Alan Linning
Alan Linning
Hong Tran
Hong Tran
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The introduction of mandatory reference checking requirements aims to curb the ability of bank employees holding specified positions who have engaged in misconduct at one bank moving to another bank, known as "rolling bad apples", without disclosing their past wrongdoing.

After a year of preparation, the Hong Kong Monetary Authority (HKMA) launched Phase 1 of the Mandatory Reference Checking (MRC) Scheme on 2 May 2023 to tackle "rolling bad apples". In short, the MRC Scheme establishes a framework requiring Authorised Institutions (AIs) to request and provide references about employees at various seniority levels and areas of responsibility. This article provides an overview of the MRC Scheme, explores potential legal issues the MRC Scheme may give rise to, and offers suggestions to AIs on navigating the new waters.

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