FCA Screening in the UK: A Complete Guide for Regulated Firms (2026 Update)
If regulated by the Financial Conduct Authority, background screening is legally required—not just best practice or optional.
The FCA's fit and proper test requires that anyone performing a controlled function, Senior Management Function, or Certification Function must be assessed for honesty, competence, and financial soundness before they can start. Failing to comply can result in regulatory penalties, significant fines, or, in the most serious cases, loss of authorisation entirely.
We will clarify FCA screening, who it applies to, required checks, and what compliance looks like in 2026. Avvanz already supports hundreds of regulated UK firms—if you need end-to-end support, we can help.
FCA screening is the pre-employment and ongoing vetting process that regulated firms must carry out to meet fit-and-proper requirements, covering all regulated staff.
The fit and proper test evaluates three things: honesty, integrity, and reputation; competence and capability; and financial soundness. All three must be assessed and documented before an individual assumes a regulated role.
Let us now look at who exactly is affected by FCA screening and what this means in practice for regulated firms.
Who Does FCA Screening Apply To?
FCA screening applies to all FCA-authorised or registered firms, and specifically to individuals performing:
- Senior Management Functions (SMFs) — require FCA pre-approval before the individual can act in the role.
- Certification Functions — must be certified as fit and proper by the firm annually.
- Conduct Rules staff — all employees except ancillary support staff must comply with FCA Conduct Rules.
In practice, this means banks, insurers, investment firms, consumer credit businesses, payment institutions, mortgage brokers, financial advisers, and all other FCA-regulated entities must have a robust, documented screening programme in place.
What Checks Are Required Under FCA Screening?
After identifying who is subject to FCA screening, we turn to the specific checks required to ensure compliance.
The exact scope depends on role seniority and function, but a comprehensive FCA screening package typically includes:
- Identity verification — confirms the individual is who they claim to be
- Right to work in the UK — mandatory for all employees.
- Criminal records check — Standard or Enhanced DBS, depending on the role; from January 2025, criminal background checks are now required at the FCA authorisations gateway for all owners and controllers.
- Credit check and financial probity — includes CCJs, bankruptcies, IVAs, and adverse financial history; directly tied to the FCA's financial soundness criterion.
- Employment history verification — minimum five years with gap analysis; longer for senior or high-risk roles.
- Qualifications verification — confirms professional certifications are genuine and current.
- FCA Register check — validates regulatory history, including past disciplinary action, prohibitions, or restrictions recorded by the FCA or PRA
- Directorship and disqualification check — confirms the individual is not disqualified from acting as a company director.
- Global sanctions and watchlist screening — includes OFAC, HM Treasury, PEPs, CIFAS Fraud Database, and adverse media.
- Regulatory references (SYSC 22) — required for roles within scope; firms must request and provide structured regulatory references from previous regulated employers covering the past six years
The SM&CR: Why Individual Accountability Matters
The Senior Managers and Certification Regime (SM&CR) replaced the Approved Persons Regime in December 2019 and applies to all FCA-regulated firms. Its core purpose is to drive individual accountability at every level of a regulated organisation.
Under SM&CR, firms cannot rely on blanket compliance. They must identify which individuals hold which functions, ensure those individuals are vetted to the appropriate standard, and maintain clear, auditable documentation of every screening and certification decision.
Annual recertification of Certified Persons is an ongoing obligation — not a one-time task. FCA screening is not a hire-and-forget process. It requires a continuous, scalable infrastructure to remain compliant year after year.
Key Updates: What Changed in 2025 and What to Watch in 2026
January 2025 — Criminal background checks at the authorisations gateway. The FCA introduced a requirement for criminal background checks on all owners and controllers at the authorisations gateway, following a FATF recommendation to prevent criminals from owning or controlling regulated financial institutions. Applicants for FCA authorisation and those notifying a change in control must now confirm that a DBS check (or an equivalent for persons outside England and Wales) has been completed within the previous 6 months.
2025 onwards — Increased FCA scrutiny on financial crime controls. The FCA has signalled continued focus on financial crime, including money laundering, fraud, and sanctions evasion. Firms are expected to ensure their screening programmes adequately address financial crime risk — not just employment eligibility. This includes more rigorous screening for adverse media and PEPs, particularly for senior hires.
2026 — Consumer Duty embedding. While Consumer Duty came into force in 2023–2024, the FCA's supervisory focus in 2026 continues to assess whether firms have embedded the right culture and people controls to support good consumer outcomes. Firms should ensure their screening and certification frameworks reflect the competence and conduct standards expected under Consumer Duty — particularly for client-facing and advisory roles.
What Should Regulated Firms Do Now?
In light of these regulatory developments, what practical steps should regulated firms take now to stay compliant and prepare for changes?
To maintain a compliant and future-proof FCA screening programme:
- Map all roles against SM&CR requirements — identify who requires FCA pre-approval, firm certification, or conduct rule application.
- Implement a role-tiered screening framework that scales the depth of checks to the risk and seniority of each function.
- Incorporate regulatory reference processes into both onboarding and offboarding — SYSC 22 obligations run in both directions.
- Ensure annual recertification of Certified Persons is embedded in your HR calendar, not treated as an ad hoc exercise.
- Maintain complete, auditable records of every screening and certification decision — the FCA can and does request these.
- Review your screening programme against the January 2025 changes to criminal background checks and the FCA's ongoing financial crime supervisory priorities.
How Avvanz Supports FCA Screening Compliance
Avvanz is a multi-award-winning background screening provider already trusted by banks, insurers, investment firms, and regulated financial services businesses across the UK. We have supported many numbers of UK-regulated firms in building compliant, auditable screening frameworks — and we understand the specific demands of FCA-regulated hiring inside out. Our FCA-aligned screening packages include all required checks in a single workflow: identity, right to work, FCA Register validation, financial probity, global sanctions screening, and SYSC 22 regulatory references.
Whether you are onboarding a new Senior Manager, running annual Certified Persons recertification, or building a consistent screening framework across your entire regulated workforce, Avvanz gives your compliance and HR teams the tools, audit trail, and expert support they need.
Join the hundreds of UK financial services firms already screening with Avvanz. Contact us at consult@avvanz.com or request a demo today — and see how we can simplify your FCA compliance from day one.