FCA reduces time for companies to respond to Regulated References: 2026 updates

The Financial Conduct Authority (FCA) has introduced updated FCA reference time limits as part of its 2026 reforms to the Senior Managers and Certification Regime (SM&CR). These changes are designed to strengthen high standards of accountability across financial services.

For regulated firms, the shift in FCA reference time limits is more than a procedural update—it’s a clear signal to modernise compliance processes and rethink how regulatory references are managed.

What changes are the FCA making?

1. Regulatory references – response time reduced
   Under the updated rules, the FCA has reduced the expected turnaround time for regulatory reference requests from six weeks to four weeks. These revised FCA reference time limits apply to all relevant firms requesting or providing references under SM&CR. While the timeline has been shortened, the FCA has not relaxed expectations around the quality, accuracy, or completeness of references. Firms must still ensure that all disclosures are fair, evidence-based, and compliant. A 3rd party background screening partner like Veremark can help you speed this up.

2. Criminal records checks for Senior Managers are now explicitly required
   Firms must obtain a standard criminal records check for anyone being appointed to a Senior Manager Function (SMF). This isn’t new in practice, but the FCA has now made the requirement explicit in the rules to remove ambiguity
   
   
3. Annual Fitness & Propriety assessments
   The FCA has reinforced that Fitness & Propriety assessments must be completed every 12 months for all certified staff, with clear evidence kept to support the decision. Additionally, individuals returning from long‑term leave must be reassessed for F&P before resuming a Certification role. This isn't new but the FCA is reinforcing that firms must carry out assessments every 12 months, not “roughly annually”

Why are the FCA reference time limits changing now?

The introduction of tighter FCA reference time limits reflects broader regulatory priorities in 2026:

Faster, more efficient regulation

The FCA is streamlining administrative processes within SM&CR to reduce unnecessary burden while preserving accountability. Updating FCA reference time limits is a key part of this effort.

Focus on better decision-making

The FCA is encouraging firms to exercise stronger judgement when drafting references—particularly in complex cases involving misconduct or ongoing investigations. Shorter FCA reference time limits mean firms must make these decisions more efficiently.

Read the full details from the FCA

The impact of FCA reference time limits on firms

The reduction in FCA reference time limits creates immediate operational challenges:

• Compressed timelines for gathering and verifying employment history
• Increased pressure on HR, compliance, and legal teams
• Greater reliance on accurate, well-maintained internal records
• Higher risk of non-compliance if deadlines are missed

In short, firms must now deliver the same level of diligence—but within a significantly shorter timeframe.

Outsourcing your background checks serves as a strategic advantage

The updated FCA reference time limits create a strong case for partnering with an outsourced background screening provider such as Veremark.

1. Meet FCA reference time limits with confidence

Outsourced providers specialise in fast, compliant background checks. Their infrastructure and automation capabilities help firms consistently meet FCA reference time limits without delays.

2. Reduce internal workload

Shorter FCA reference time limits can overwhelm internal teams. Outsourcing reduces administrative burden, allowing HR and compliance professionals to focus on higher-value tasks.

3. Ensure consistency and compliance

With increased scrutiny on how references are written, consistency is critical. Veremark provides standardised processes that align with FCA expectations, reducing regulatory risk.

4. Handle complex cases effectively

From ongoing investigations to sensitive disclosures, experienced providers can support firms in navigating difficult reference scenarios—within FCA reference time limits.

5. Scale with hiring demand

Whether hiring volumes increase or fluctuate, outsourced solutions provide the flexibility needed to maintain compliance with FCA reference time limits at all times.

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Final thoughts on FCA reference time limits

The FCA’s decision to shorten regulatory reference timelines marks a significant evolution in the SM&CR framework. FCA reference time limits are now tighter, expectations remain high, and the margin for error is smaller.

Firms that continue to rely on manual, resource-heavy processes may struggle to keep up. Those that embrace outsourcing and automation will be better positioned to meet FCA reference time limits—while improving overall hiring and compliance outcomes.

As regulatory expectations continue to evolve, the question is no longer whether to adapt, but how quickly firms can respond.

Calculate your ROI on outsourcing background screening today.