DBS Checks & Background Screening for Financial Services | FCA Compliance

Financial services are one of the UK’s most important sectors, contributing over £132 billion to the economy each year. Strict Financial Conduct Authority (FCA) regulations govern how financial services recruit and employ staff. This makes DBS Checks essential. Any firm regulated by the FCA must demonstrate that staff are ‘fit and proper’ to perform their allocated role. DBS Checks are just the tip of the iceberg when it comes to satisfying FCA compliance.

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Types Of DBS Check

DBS Checks are a mandatory requirement under the FCA’s Senior Management and Certificate Regime. FCA regulated firms need either Standard or Basic DBS Checks, dependent on the staff members role.

Standard DBS Checks are mandatory for any employee who is carrying out a Senior Management Function. This level of DBS Check will search an applicant’s criminal record history for cautions, warnings, reprimands as well as spent and unspent convictions.

For all other employees, a Basic DBS Check is recommended. This level of DBS Check includes a search of the Police National Computer. It will search for any unspent convictions or conditional cautions the applicant may have.

Types of Background Check

Adverse Financial Checks: Adverse Financial checks show any worrying credit history. This includes CCJ’s, Bankruptcy and Individual Voluntary Arrangements (IVA). These checks can provide invaluable information when determining whether an individual meets the FCA definition of ‘fit and proper’.

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

Sanctions Checks: These checks search for sanctions, enforcements and warnings worldwide. The search includes individuals known or suspected to be affiliated with terrorism, money laundering, fraud, white-collar crime and other illegal activities. It also highlights Politically Exposed Persons (PEPs). This check is particularly useful when recruiting senior-level staff to ensure they pass the ‘fit and proper’ criteria.

Combating Identity Fraud

Financial services are regularly targeted by those with malicious intentions with fraud being one of the most common white-collar crimes. Fraud is estimated to cost the UK economy over £190 billion each year. It is vital that you do everything you can to ensure that you don’t become a victim of this type of offence. There is a range of checks that you can employ to help combat this risk:

Identity Checks: Our Identity Checks use advanced technology to provide a score indicating a degree of confidence in a person’s identity. Combined with a DBS Check and references, you can be sure you’re employing the right person.

Occupational History Checks: These checks can be used to run searches into a candidates work history and can cover up to 6 or 10-years. Having a clear picture of someone’s occupational history can give you the assurance you need that the applicant you’re engaging has the necessary experience.

Education Checks: There have been a number of high-profile cases in recent years where unqualified individuals have gained employment using falsified credentials. Our education checks provide a comprehensive report confirming the level and types of qualifications gained by an applicant.

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We examine the mandatory requirements for background checks for FCA regulated firms.

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Why Personnel Checks?

Personnel Checks provide comprehensive screening services to a range of public and private sector financial institutions. We are members of several background screening trade bodies, and our managing director is the sitting vice-chair of the Criminal Record Trade Body (CRTB). Personnel Checks are at the forefront of the industry and use this position to provide better solutions for our customers. To discuss any type of check or combination of screening products, give us a call on 01254 355659 for a no obligation consultation or click the button below to request a call back.

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Frequently asked questions

A Senior Management Function (SMF) is a type of controlled function under the Financial Services & Markets Act 2000 (FMSA). Staff members within FCA regulated firms carrying out a role prescribed in the FCA Handbook as an SMF require a Standard DBS Check to be carried out to be compliant.
Individuals are not limited to one SMF. Depending on their role, staff members may cover 2 or more SMFs. For example, a director can perform the director function and also the compliance oversight function at the same time.
When carrying out a Standard DBS Check, there needs to be someone available to make a recruitment or suitability decision based upon the result of that check. This person usually needs to be of equal or higher standing than the DBS Check applicant. If you are the sole employee or most senior individual in a firm, this makes things inherently difficult.
In the case of FCA regulated firms, external compliance firms helping you apply to the SM&CR are able to fulfil this role in lieu of a staff member within the firm itself. This is because the Disclosure and Barring Service (DBS) considers them to be suitably placed to make a decision about whether or not you are fit and proper to proceed with your application to the SM&CR.
If you have any questions about recruitment and suitability decision-makers for your DBS Check, give us a call on 01254 355688 and we can discuss this with you.
The cost of a DBS Check varies depending on which level of check is being applied for. Our list prices are:
Basic DBS Check: £43.10
Standard DBS Check: £52.20
Enhanced DBS Check: £75.90
Volunteer DBS Check: £26.40
What you see is what you get. We have no hidden fees and we don’t charge extra for ‘fast-track’ services that don’t exist.
Prices include VAT.

SM&CR stands for The Senior Managers and Certificate Regime. This was introduced by the FCA to replace the Approved Persons Regime in 2015.

The aim of the SM&CR is to tighten compliance of financial services, strengthen market integrity, reduce harm to consumers and making individuals more accountable for their conduct.
The SM&CR applies to all firms authorised under the Financial Services and Markets Act 2000 (FMSA). The FCA has published guidance on how to classify your firm under the new regime, which can be found here.

The FCA estimate that around 47,000 firms are subject to the rules described in the SM&CR.
Part of the reason FCA and PRA regulated firms must conduct background checks is to demonstrate that those fulfilling SMFs are ‘fit and proper’. The fit and proper test is a benchmark used to assess whether or not an individual is suitable to perform SMFs.
Before a firm submits an application to the FCA to make someone an SMF approved person, they must satisfy themselves they are fit and proper. Once this assessment is complete and the approved person application submitted, the FCA will then re-assess the individual to confirm they are honest, competent and financial sound.
Full details can be found here.