On 7 March 2017, stringent new rules on references for the
financial services sector came into force. This is the latest stage
of implementation of the FCA and PRA's new Senior Manager &
Certification Regime (SM&CR), which came into effect in March
2016.
For now, the new rules apply to 'relevant firms', which
means banks, building societies, credit unions, the larger
investment banks regulated by the PRA and branches of foreign banks
operating in the UK. There are plans afoot to extend the SM&CR
to all regulated firms during 2018, which are currently under
consultation. It remains to be seen as to whether the regulatory
references rules will also be extended more widely.
Relevant firms are now required to obtain regulatory references
before appointing individuals to perform certain specified
functions. The rules apply both where an individual moves from
firm-to-firm and also to a different role within the same firm. The
firm must take reasonable steps to obtain
