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FCA Compliancy and DBS Checks

Making your firm FCA compliant can be difficult. At Personnel Checks, we aim to cut through the legalese and give you the simple answers. 

Do you or your employees actually need a DBS check? The answer: most likely! 

Up until recently, the FCA determined that any employee of a regulated firm, carrying out a ‘controlled function’, required a Standard DBS Check. This was known as the Approved Persons Regime. This has now been replaced. 

The Senior Management and Certification Regime (SM&CR) was brought in on 9th December 2019.  

Since the financial crash of 2008, the government have made great strides in legislation regulating this industry. The aim of this improved scheme is “to reduce harm to consumers and…making individuals more accountable for their conduct".  

 

What Checks Do We Need Now? 


With the new scheme comes with it a new check. Now, employees 
could need one of the below 2 checks: 

Basic DBS Check: Contains details of any unspent convictions or cautions. 

Standard DBS Check: Contains details of any spent or unspent convictions, cautions, reprimands, or warnings the candidate has. Non-convictions are sometimes protected. This mean they are only shown when the police consider it relevant. 

Under the new SM&CR regime, it is only employees the FCA classify as having Senior Management Function (SMF) roles who require the Standard DBS Check.  

There are 21 identified SMF’s for solo-regulated firms and this increases to 25 for firms dual-regulated by the PRA and FCA.  

See the full list below: 
SMF 1 Chief Executive function  
SMF 2 Chief Finance function  
SMF 3 Executive Director  
SMF 4 Chief Risk function  
SMF 5 Head of Internal Audit  
SMF 6 Head of Key Business Area  
SMF 7 Group Entity Senior Manager  
SMF 8 Credit Union SMF 
SMF 9 Chairman  
SMF 10 Chair of the Risk Committee 
SMF 11 Chair of the Audit Committee  
SMF 12 Chair of the Remuneration Committee  
SMF 13 Chair of the Nomination Committee  
SMF 14 Senior Independent Director  
SMF 15 Chair of the With-Profits 
SMF 16 Compliance Oversight  
SMF 17 Money Laundering Reporting  
SMF 18 Other overall responsibility function  
SMF 19 Head of Overseas Branch  
SMF 20 Other local responsibility function 
SMF 21 EEA Branch Senior Manager  
The following senior management functions are specific to the insurance sector and are governed by the PRA:  
SMF 20 Chief Actuary  
SMF 20a With Profits Actuary  
SMF 23 Chief Underwriting Officer  
SMF 23a Underwriting Risk Oversight (Lloyds)  
SMF 24 Chief Operations  
SMF 25 Small Insurer Senior Manager Function 

 

Any other employees would only be expected to have the Basic DBS check. However, some FCA regulated firms also opt to carry out extra checks on their employees.  

Adverse Financial checks would show any worrying credit history. This includes CCJ’s, Bankruptcy and Individual Voluntary Arrangements (IVA). This can be an invaluable addition to your screening process. 

Finance is an international industry and DBS Checks only cover time spent the UK. International Criminal Record Checks can provide an extra level of certainty when making your recruitment decision. 

Whichever checks you need; Personnel Checks can provide tailored background screening solutions for your business.  

If you have any questions about DBS or other checks, please don’t hesitate to call on 01254 355688 or drop us an email on [email protected].

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