FCA reduces time for companies to respond to Regulated References: 2026 updates
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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?
- 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.
- 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 - 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.
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.
FAQs
Yes, many employee onboarding software solutions include features that help ensure compliance with labour laws and industry regulations. This can include automated document collection, e-signature capabilities, and tracking of required background checks, training and certifications.
Yes, employers can view a DBS certificate online using the DBS Update Service, provided the applicant has subscribed to the service and given their consent.
Yes, Veremark specialises in providing comprehensive and compliant background checks that meet all UK legal requirements. Our processes are designed to be thorough, ensuring that your business adheres to regulatory standards efficiently.
Consider your company's size, industry, budget, and specific onboarding needs. Look for software that integrates with your existing systems and offers a user-friendly interface with reliable customer support.
FAQs
This depends on the industry and type of role you are recruiting for. To determine whether you need reference checks, identity checks, bankruptcy checks, civil background checks, credit checks for employment or any of the other background checks we offer, chat to our team of dedicated account managers.
Many industries have compliance-related employment check requirements. And even if your industry doesn’t, remember that your staff have access to assets and data that must be protected. When you employ a new staff member you need to be certain that they have the best interests of your business at heart. Carrying out comprehensive background checking helps mitigate risk and ensures a safer hiring decision.
Again, this depends on the type of checks you need. Simple identity checks can be carried out in as little as a few hours but a worldwide criminal background check for instance might take several weeks. A simple pre-employment check package takes around a week. Our account managers are specialists and can provide detailed information into which checks you need and how long they will take.
All Veremark checks are carried out online and digitally. This eliminates the need to collect, store and manage paper documents and information making the process faster, more efficient and ensures complete safety of candidate data and documents.
In a competitive marketplace, making the right hiring decisions is key to the success of your company. Employment background checks enables you to understand more about your candidates before making crucial decisions which can have either beneficial or catastrophic effects on your business.
Background checks not only provide useful insights into a candidate’s work history, skills and education, but they can also offer richer detail into someone’s personality and character traits. This gives you a huge advantage when considering who to hire. Background checking also ensures that candidates are legally allowed to carry out certain roles, failed criminal and credit checks could prevent them from working with vulnerable people or in a financial function.
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