FSA Consultation Paper 133 - 'Access to Criminal Records'

United Kingdom
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 at http://www.crb.gov.uk/ce/cop.htm). 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 amended)

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 industry’.

Anyone wishing to comment on the Paper should respond to the FSA by 5 July 2002.

To access the full consultation paper please click here http://www.fsa.gov.uk/pubs/cp/133/

For further information please contact Simon Morris by e-mail at simon.morris@cms-cmck.com or by telephone on +44(0)20 7367 2702.