Introduction of criminal background checks on owners and controllers at the Authorisation’s Gateway'

Back in July 2024, the FCA released CP24/11: Quarterly Consultation Paper No. 44 where they proposed the idea of introducing criminal background checks on owners and controllers at the Authorisations Gateway after recommendations by the Financial Action Task Force (FATF).

On 9 December 2024 the Executive Regulation and Policy Committee approved the change with an implementation date of 17th January 2025.

What does this mean?

Prior to 17th January 2025, only individuals looking to hold a Senior Manager Function needed to get a DBS check done but this has now been extended to enhance assessments of controllers, with the aim of strengthening the gateway and creating greater market integrity and consumer protection.

This change mainly applies to Authorisation and Change in Control (CiC) applications but could apply as part of a Variation of Permission (VoP).

As part of the applications for individual owners/ controllers, the FCA will now be asking whether a DBS check has been completed within the last 6 months, and if not, this will need to be done prior to submitting the application. In some cases, the FCA may ask to see the DBS check but this will be determined on a case by case basis.

There will be some exceptions to this process. For example, controllers of ARs are out of scope, and where controllers are based in jurisdictions where criminal records checks cannot easily be undertaken, then allowances will be made. In addition, where time sensitive Change in Control applications are required (such as in the case of bank bailouts), then allowances will also be made to avoid delays to this process.

What do I need to do?

If you are currently authorised and are not about to submit any applications to the FCA – then nothing at this time.

If you are in the process of submitting an Authorisation, VoP or CiC application and you are an individual owner/ controller - you will now need to get a DBS check completed as part of the application process.

If you have any questions or need DBS checks completed, please get in touch as we are able to assist with these.