July 2024
Dear Clients and Friends,
Criminal Background Checks on Controllers
A brief but potentially important update from the FCA…you may have missed it but in their June quarterly consultation paper the FCA proposed plans to require proposed controllers of regulated firms to complete criminal background checks.
If adopted, from January 2025, new controllers, either of a firm seeking authorisation for the first time or an already authorised firm going through a change of control process, would need to have a recently completed standard DBS check prior to their approval. This is similar to that which is already required of senior management function holders. If the proposed controller is based outside of England & Wales, they will need to complete the DBS equivalent in their country
Remember, control for FCA purposes can start from as little as 10% in shares or voting power of the regulated firm so this has potentially wide reach.
This move represents further strengthening of the FCA gateway to the industry and a determination to maintain integrity in the UK market by ensuring only suitable individuals can control FCA regulated firms.
Does this matter?
For authorised firms where there is no likely change of control, not really.
However, for firms going through a change in ownership or new applicant firms it is another box that will need to be ticked and built into project timelines. Of potential greater significance, an assessment will need to be made on the fitness of the individual to be a controller if the DBS check produces any findings.
Please contact your Judd consultants or judd@juddadvisory.com should you wish to discuss further.
