The Banking Standards Board has published its guidance on good practice for regulatory references. The guidance is based on the three key principles of proportionality, fairness and consistency.
While the guidance was designed for the banking sector, its general principles should be of interest to all firms who are, or will be, subject to the SMCR. Interesting points include:
- considering whether individuals should be given a second opportunity to comment on past proceedings, particularly when they took place before the regulatory references requirements took effect;
- that firms should provide factual accounts of uninvestigated allegations that would have been pursued had the individual not left the firm;
- ensuring individuals are aware of the contents of a reference;
- considering excluding disciplinary information that is not relevant to a fit and proper assessment;
- having in place a clear policy and process on what information is recorded and included in references;
- ensuring all relevant units know of the need to escalate poor conduct allegations as they may lead to a need to revise the reference; and
- be consistent in messages to employees about what will be included in references.
The guidance also looks at how firms should treat requests for references and what should be in one, and practical advice on requesting and receiving references, and dealing with cases where references are not received.