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FCA considers more comprehensive criminal background checks on owners and controllers of financial institutions

FCA considers more comprehensive criminal background checks on owners and controllers of financial institutions
FCA considers more comprehensive criminal background checks on owners and controllers of financial institutions

The Financial Action Task Force (FATF) has recommended that the UK Financial Conduct Authority (FCA) consider conducting more comprehensive checks on the criminal backgrounds of owners and controllers of financial institutions.

This recommendation aims to ensure that criminals and their accomplices are prevented from gaining ownership or control of financial institutions.

The FCA currently conducts criminal background checks based on a risk-based approach, meaning checks are carried out when specific concerns arise about an individual’s suitability and integrity.

In line with the FATF recommendation, the FCA is now proposing to require controllers and beneficial owners to undergo a criminal background check with the Disclosure and Barring Service (DBS) (or equivalent for persons outside England and Wales). This requirement will apply to anyone applying for authorisation or registration with the FCA, and to anyone submitting a notification of an intended acquisition or increase in control (Change in Control or CIC).

The FCA’s proposals apply to the following persons:

  • Potential controllers submitting a CIC notice under Part XII of the Financial Services and Markets Act 2000 (FSMA)
  • Controllers of firms applying for authorisation as an authorised person under FSMA (New Firm Authorisations (NFA)) (both Markets in Financial Instruments Directive (MiFID) and non-MiFID)
  • Persons with a qualifying holding in a payment institution or electronic money institution
  • beneficial owners of Schedule 1 financial institutions and cryptoasset companies registered under Regulation 54(1A) of the Money Laundering Regulations (MLRs)
  • Persons submitting a CIC notification under the MLRs, the Payment Services Regulations 2017 (PSRs) and the Electronic Money Regulations 2011 (EMRs)
  • Controllers who submit an application or notification to the PRA which requires the FCA to give its consent or carry out a consultation (excluding appointed representatives (AR))

Subject to feedback from this consultation, the FCA proposes that this requirement will apply to all new applications or notifications submitted from January 2025. The change will not affect applications or notifications submitted before that date, including those that have not yet been determined at the time the new requirements are introduced.

A standard DBS contains details of expunged and unexpunged convictions, cautions, reprimands and warnings, which are held in the Police National Computer (PNC) and are not subject to filtering.

From January 2025, a DBS re-check will no longer be carried out if an individual has submitted an application/notification within the last 6 months and a DBS check has been carried out.

may be required. In relation to the Change of Authorisations (VoP) process, the FCA would not require a firm that is already authorised or registered to request a DBS check. However, the firm should still ensure the suitability of its controllers and owners.

Further information on the proposals can be found here.


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