Regulatory references: will my bank hear I'm leaving?

What a regulatory reference is

Chapter 22 of the FCA's systems and controls sourcebook, known as SYSC 22, applies to every firm under the Senior Managers and Certification Regime. When one of those firms is considering appointing you to a controlled function, issuing you a certificate under the certification regime, or appointing you as a board director, it must take reasonable steps to get a reference from your current employer and from anyone who has employed you in the past six years.SYSC 22.2SYSC 22.1

This is not the courtesy reference most people are used to. Your current employer is obliged to answer, in a set template, and the answer is about whether you are fit and proper for the role.SYSC 22.2SYSC 22.4

What your employer has to put in it

• Everything it is aware of that it reasonably considers relevant to whether you are fit and proper.
• Matters from the six years before the request, and anything that happens between the request and the reference. For serious misconduct there is no time limit.
• The FCA's template: the roles you held and when, whether it concluded you were not fit and proper, and any disciplinary action for breaching the conduct rules.SYSC 22.2SYSC 22 Annex 1

It must provide the reference as soon as reasonably practicable. The FCA's guidance says it expects a firm normally to issue one within four weeks of being asked.SYSC 22.2SYSC 22.5

When the request goes

The rules set a deadline, not a starting gun. For a certified role, the hiring firm must have the reference before it issues your certificate. For a senior manager role, it must try to have it one month before the end of the regulator's period for deciding the application. Nothing in SYSC 22 requires the hiring firm to ask while you are still interviewing.SYSC 22.2

The rules also expect that you may still be working for your old employer when the reference is given: they deal with the case where you are serving your notice and the move falls through. A reference request while you are still employed is the normal case, not an accident.SYSC 22.2

How to plan around it

1. Assume your employer will hear. A search planned on the hope that it never finds out will fail at the last step.
2. Ask the hiring firm, before you accept, when it intends to send the request and to whom.
3. Agree that it goes after you have accepted an offer and told your employer yourself. Telling them first is a conversation; a reference request arriving first is a discovery.
4. If something in the last six years would appear in a reference, raise it with the hiring firm before the reference does.

If you work outside the UK

SYSC 22 has no territorial limit of its own, and the FCA's guidance says the duty to give a reference can apply even if you worked in an employer's overseas office. For an overseas firm, though, the duty applies only to people employed in its UK branch. If you work in Dubai or New York for a UK firm, assume a UK hiring firm will ask your employer; check with the hiring firm if your employer is not UK regulated.SYSC 22.1

Questions people ask

Can my current employer refuse to give a regulatory reference?

Not when the request meets the rules. A regulated firm must provide one when the firm asking is considering you for one of the roles SYSC 22 covers, asks in its capacity as your employer, and says why it is asking.

Does a regulatory reference say why I am leaving?

No. The template asks which roles you held and when, whether the firm concluded you were not fit and proper, and about disciplinary action. It has no question about your reasons for moving. A firm may include more than the template asks, but the FCA's guidance says a reference should be true, accurate, fair and based on documented fact.