As part of the Senior Managers and Certification Regime and the Senior Insurance Managers Regime, large financial services institutions (mainly UK banks, building societies and insurers) now have additional obligations in respect of regulatory references for candidates moving into materially regulated staff positions.
In brief, references need to cover the candidate’s employment history for the previous 6 years; and for any references given on or after 7 March 2017, there is an obligation on employers to update references given in the past 6 years if any new relevant information comes to light that means the reference is no longer accurate.
Why this matters? Employers caught by the new regime will have to do more to satisfy themselves that the individual is fit and proper before moving into the relevant position. There will now also need to be increased rigour around the updating of references given by firms if new information comes to light which affects the accuracy of the reference. An employer’s need to meet their regulatory obligations may mean increased exposure to litigation from former employees where a regulatory reference is updated negatively.