FCA Handbook - SYSC 22.8 Policies and requests for references from and by persons who are not firms

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SYSC 22.8 Policies and requests for references from and by persons who are not firms

Policies and procedures

A firm must establish, implement and maintain policies and procedures that are adequate for the purpose of complying with the obligations in this chapter.

(1)
SYSC 22.8.1R does not require a firm to create or keep records that are not required under SYSC 22.9.1R (General record keeping rules) or another rule.
(2)
(1) applies to a firm whether or not SYSC 22.9.1R applies to it.

Appointed representatives

This chapter applies:

(1) in relation to a firm’s appointed representatives as well as to the firm; and
(2) to a firm asked to give a reference by or on behalf of an appointed representative and to a firm obtaining a reference from an appointed representative,

and must be interpreted with the necessary adjustments.

There is no requirement that an appointed representative meet the following requirements:

(1)
SYSC 22.2.1R (Obligation to obtain references);
(2)
SYSC 22.2.2R(4) (Obligation to give references);
(3)
SYSC 22.2.4R to SYSC 22.2.6R (Obligation to revise references);
(4)
SYSC 22.4.2R (How to draft the reference);
(5)
SYSC 22.8A.1R (Intra-group transfers); and
(6)
SYSC 22.9.1R (General record keeping rules).

(1)
The approved person’s authorised approved person employer is responsible for compliance with SYSC 22.8.3R in the case of a requirement:
1. (a)
  to give a reference about an approved person whose approval is under SUP 10A (FCA Approved Persons in Appointed Representatives); and
2. (b)
  [deleted]
3. (c)
  under SYSC 22.2.7R in relation to any such person.
(2)
In any other case, each principal of the appointed representative in question is responsible for compliance with SYSC 22.8.3R.
(3)
If another principal of the appointed representative has accepted responsibility for the obligation in SYSC 22.8.3R, that principal is responsible in place of the other firms in (1) or (2).

(1) This provision explains the effects of SYSC 22.8.4R.
(2) When an appointed representative appoints an approved person under SUP 10A (FCA Approved Persons in Appointed Representatives) there is no requirement for the appointed representative to request a reference or to use the intra-group information procedures in SYSC 22.8A.1R (Intra-group transfers).
(3) There is no requirement for the appointed representative to disclose the information in questions A to F of Part One of SYSC 22 Annex 1R (Template for regulatory references given by SMCR firms and disclosure requirements) when giving a reference under this chapter and there is no obligation for a firm requesting a reference from the appointed representative to ask for this information.
(4) However, an appointed representative should give the information required by SYSC 22.2.2R(2) (Obligation to give references) and a firm should seek such information from an appointed representative.
(5) There is no requirement under this chapter for the appointed representative to update under SYSC 22.2.4R references it has given.
(6) There is no requirement for the appointed representative to use the template in Part One of SYSC 22 Annex 1R (Template for regulatory references given by SMCR firms and disclosure requirements) when giving a reference under this chapter.
(7) There is no requirement for the appointed representative to comply with SYSC 22.9.1R (General record keeping rules).
(8) For the sake of simplicity, this provision refers to what an appointed representative should do and need not do. Technically, such references are to what the principal of an appointed representative should ensure that its appointed representative does and what it need not ensure it does.

This chapter does not apply in relation to an appointed representative of a firm that is not an SMCR firm.

(1)
A firm should ensure that its appointed representative gives a reference when another firm (or its appointed representative) asks that appointed representative to give a reference in accordance with this chapter.
(2)
A firm is not responsible for its appointed representative’s giving references if another principal has accepted responsibility for this.
(3)
The appointed representative need not give the reference using the template in SYSC 22 Annex 1 (Template for regulatory references given by SMCR firms and disclosure requirements).

If an appointed representative asks a firm for a reference, the firm should give one. The requirements of this chapter apply to the firm in the same way as they would if the appointed representative were a firm.

(1)
A firm should try to ensure that its appointed representative considers whether it needs to disclose a breach of individual conduct requirements (as defined in Part Two of SYSC 22 Annex 1R (Template for regulatory references given by SMCR firms and disclosure requirements)) when giving a reference under this chapter.
(2)
Therefore an example of information that may be relevant under SYSC 22.2.2R(1) to (3) is the fact that the employee has breached a requirement in APER, not just a requirement in COCON.

Firms applying for authorisation

This chapter applies to a firm asked to give a reference by a person who:

(1) is applying to be authorised; and
(2) will be an SMCR firm if it is authorised,

in the same way as it does to a request by a firm and must be interpreted with the necessary adjustments.

(1) This provision describes the main adjustments to the rules in this section where SYSC 23.8.11R applies.
(2) The first column of row (A) of the table in SYSC 22.2.3R (Table: What positions need a reference) should be read as referring to what will be an FCA controlled function or a PRA controlled function if the person is authorised.
(3) The first column of row (B) of the table in SYSC 22.2.3R should be read as referring to issuing a certificate if the person is authorised.
(4) Rows (C) and (D) of the table in SYSC 22.2.3R only apply if the person to be appointed as described in the first column will fall into the relevant category if the person is authorised.
(5) Row (C) of the table in SYSC 22.2.3R only applies if the person applying for authorisation will be a PRA-authorised person if the person is authorised. Row (D) of that table only applies if the person applying for authorisation will be a firm of the type described in the ‘Comments’ column of that row if the person is authorised.
(6) SYSC 22.2.4R and SYSC 22.2.5R (Obligation to revise references: The main rule) are adjusted so that where A was an unauthorised person when B gave the reference, B does not need to update A if A is not a firm and its application for authorisation has been withdrawn or determined. A and B refer to A and B as referred to in that rule.
(7) SYSC 22.2.7R (Obligation to revise references: Finding out who the current employer is) applies even though A (as referred to in that rule) was given a reference at a time when it was not a firm.
(8) SYSC 22.8.3R applies and so:
1. (a) a principal should ensure that its appointed representatives give a reference if asked to by a person applying to be authorised; and
2. (b) this chapter applies to references requested by or on behalf of someone who will be an appointed representative of the person concerned if that person is authorised.