The Financial Conduct Authority (FCA) requires that people in positions of authority and trust within the financial services sector in the UK are honest and trustworthy.
As part of this, they mandate that individuals’ background is checked, including their criminal record and experience and this forms part of their ‘approved persons’ regime.
To be clear, the FCA doesn’t actually do the checks but they do require that regulated firms either carry them out or have them done by an outside specialist such as Checkback.
What is the Approved Persons regime?
An approved person is someone who is carrying out specific controlled functions within an FCA regulated firm.
The aim is to ensure that people who are working in the industry are risk-assessed and pose as little danger to their clients as possible.
The approved persons regime doesn’t remove all possibility of someone doing something wrong, but it does reduce the likelihood.
The approved persons regime consists of three elements;
- The fit and proper test
- A set of conduct rules
- A requirement to self-report anything that may affect their suitability
What is a controlled function?
A controlled function is a job role within a regulated firm that has significant power in regard to the organisation.
These are generally high-level roles and people who perform them have to comply with the approved persons regime.
Typically a controlled function will be people in management or executive positions.
- Executive directors
- Independent directors
- The CEO
- Compliance director or manager
- Money Laundering Reporting Officer (MRLO)
- Chief risk officer
- Head of Internal audit
This isn’t an exhaustive list and you can find the FCAs own schedule here
What is the FCA fit and proper test?
The fit and proper test is a series of checks into the background of a senior employee.
The aim is to assess how fit the person is to carry out controlled functions.
The Fitness and propriety check looks at;
- Honesty – including criminal records and their openness in answering the questions
- Competence and capability – do they have the experience and training to act in their role?
- Financial Soundness – are they more susceptible to carrying out theft or fraud due to financial distress?
We’ve written a longer explanation of the FCA check here.
How you can get an FCA check
Employees can’t carry out an FCA check on themselves, instead, employers will run the assessment using their own systems.
If you are an employer and you’d like to find an easier way to run your FCA background checks then get in touch now.
We are Europe’s leading provider of DBS checks, reference verification, address verification and many more.
Call us now on 0144 281 6333 or email email@example.com