The Financial Services Authority (“FSA) has recently
published a consultation paper (CP 133), which deals with the means
of access to criminal records.
The stated purpose of the Paper is to:
- draw the industry’s attention to the new means to gain
access to criminal records available to them through the Criminal
Records Bureau (“CRB) and to propose giving continuing effect
to this through changes to the FSA Handbook.
- invite comments on amendments to existing Handbook text to
reflect recent amendments to the Rehabilitation of Offenders Act
1974 (“ROA) and the terms under which the FSA has registered
with the CRB.
The financial services industry has been one of the
few sectors where for some years there have been exceptions
allowing access to ‘spent convictions’ for certain
posts and offences. These exceptions allow the industry to require
disclosure of information about spent convictions in certain
circumstances. However, until now there have been no arrangements
to get this information other than by using the ‘enforced
subject access’ process which involved asking the job
applicant to apply to the police for the relevant record under
section 56 of the Data Protection Act 1998.
In November 2001, the provisions in the
Rehabilitation of Offenders Exceptions Order 1975 (the
“Exceptions Order) relating to the financial services
industry in England and Wales were amended to bring them into line
with the provisions in the Financial Services and Markets Act 2000
(“FSMA). Having made the necessary legislative amendments,
the CRB’s services became available to the industry as from
1st April 2002.
Levels of Disclosure
Now, anyone will be able to apply to the CRB for a
‘Basic Disclosure’, the lowest level of disclosure,
after first confirming their identity. This disclosure will show
all of their convictions held at national level (i.e., on the
Police National Computer) which are not ‘spent’ under
the ROA. Any employer will therefore be able to ask a successful
job applicant to apply for a Basic Disclosure (due to be available
as from summer 2002) at a cost of £12.
The next level of disclosure, the ‘Standard
Disclosure’, will only be available for posts or for purposes
which are excepted for the purposes of the ROA (e.g., an
‘approved person’ under section 59 of FSMA). This
disclosure will include details of all convictions on record,
including spent convictions under the ROA, cautions, reprimands and
warnings held at national level. As at present, it is the
individual who applies for the information but a body that is
registered with the CRB must countersign the application.
The information will then be sent to both the individual and the
registered body. Standard Disclosures became available to the
industry as from 1st April at a cost of £12.
The third and highest level of disclosure,
‘Enhanced Disclosure’, will not be made available to
the financial services industry.
The FSA has registered with the CRB but its
registration is limited to the checks that it proposes to do both
as an employer and regulator. Hence, any firm wishing to have
access to Standard Disclosures will need either to register in its
own right or use an umbrella organisation to act on its behalf.
This second option may be of particular relevance to smaller firms.
Registered bodies and umbrella organisations will need to comply
with the CRB’s Code of Practice (see the CRB’s website
With regard to all recipients of Standard Disclosures, the key
elements of the Code are:
- to use the information received fairly;
- to handle and store the information appropriately; and
- to keep the information for no longer than is necessary.
What Firms will need to consider
They will need to make sure that they process any
information they receive from the CRB in a way that meets the
requirements of the Data Protection Act 1998, particularly as the
information sought is likely to be ‘sensitive personal
data’ under the Act. Firms will also need to consider any
effect the use or misuse of such information may have on their
professional indemnity insurance (PII) cover. For example, they may
face claims for misusing the information received and/or for
breaches of the Data Protection Act.
Employers receiving Standard Disclosures will need
to ensure that:
- they only make use of spent convictions for which the financial
services industry has an exception; and
- they only use such Disclosures in connection with posts and in
circumstances which are excepted under the Exceptions Order (as
Amendments to Handbook
In order to reflect these new rights of access to
job applicants’ criminal records, the FSA is proposing
various changes to the Handbook. The proposed changes are set out
in section 4 of the CP and additional proposed text can be found in
Annex B. The key changes are:
- Adding a new question 11A to the FAQs section appearing in
Annex 1 G to SUP 10 of the Handbook which asks: “Should these
checks include a check of criminal records? The text of the answer
makes it clear, amongst other things, that it is for senior
management to decide what checks should be made but that Firms
should be aware that records available to the CRB can be checked
through the Bureau.
- Amending Form A (Application to perform controlled functions
under the Approved Persons Regime) in Annex 4D to SUP 10.
- Amending FIT 2.1 (as regards matters to take into account when
determining a person’s honesty, integrity and reputation) to
reflect the amendment to the Exceptions Order and to show
compliance with the CRB’s Code of Practice.
- A new FIT 2 Annex 1G setting out the ‘Exceptions to the
Rehabilitation of Offenders Act relevant to the financial services
Anyone wishing to comment on the Paper should
respond to the FSA by 5 July 2002.
To access the full consultation paper please click
For further information please contact Simon Morris
by e-mail at firstname.lastname@example.org or
by telephone on +44(0)20 7367 2702.