The UK's Financial Conduct Authority has put off its plans to require financial firms to demand 'regulatory references' from each other when people move jobs between them. It was planning to do so before 7 March.

According to an FCA spokeswoman, "the relevant rule will now, hopefully, be publicised in the summer, and then firms will have a transitional period to implement it." It was in September that the FCA first proposed to make such a rule with the aim of making senior managers at banks and other financial institutions more accountable for any misconduct that fell within their areas of responsibility. No date has been set for it.

The FCA, in the preamble to its latest policy paper which mentions the delay, states that its upcoming Senior Managers and Certification Regime (SM&CR), of which regulatory references are a part, aims to hold individuals working at all levels at banks and other relevant firms to appropriate standards of conduct. This is part of a wider policy to improve accountability at (i) banks, building societies and credit unions (to which the FCA, with its love of acronyms, refers as RAPs or relevant authorised persons) and (ii) insurers.

The Financial Services (Banking Reform) Act 2013 created the law that underpins the regulators' Senior Managers and Certification Regime. This followed on from the publication of recommendations by the Parliamentary Commission on Banking Standards in a document called 'Changing Banking for Good.' Parliament appointed the commission to consider and report on professional standards and culture at British banks in the wake of the scandals of the financial meltdown of 2008.

Last year, the Fair and Effective Markets Review (FEMR) recommended that “the FCA and the Prudential Regulation Authority should consult on a mandatory form for regulatory references, to help firms prevent the ‘recycling’ of individuals with poor conduct records between firms, with a view to having a template ready for the commencement of the SM&CR in March 2016”. This, however, was not to be. The original proposals were to insist on firms exchanging references (which the FCA, presumably, could read anytime) that listed applicants' "concluded breaches of the conduct requirements of FCA Conduct Rules (COCON), PRA Conduct Rules or Conduct Standards, and Statements of Principle and Code of Practice for Approved Persons (APER) going back six years."

The operative phrase here is the ungrammatical "concluded breach" which, maddeningly, the FCA never defines. The meaning of it is evident from the context, however. The consultative paper (CP15/31) refers to "facts that led the employer to conclude that the candidate breached a conduct rule," "where the firm has concluded at any point...that the candidate was in breach of...a rule" and "when a firm subseqently concludes that misconduct and a breach of the relevant rules or standards has occurred." There are other uses of the word 'conclude' that muddy the waters slightly, but the FCA is doubtless referring to moments when the firm that the job-hunter is leaving believed him to have broken the rules. Firms will soon be obliged to tell the FCA their thoughts.

Another proposal was to force each firm to say when it had concluded, at any point in the six years before the request for a reference, that the candidate was not fit and proper to perform a function, listing the facts that led it to that conclusion. There was also a proposal to make such a firm list its reasons for, and the outcome of, any disciplinary action that flowed from it concluding that the person had broken a rule or was not 'fit and proper.' This last disclosure, the FCA thought, should say whether the firm issued him with a formal warning or cut his pay on the pretext of disciplining him.

Also evident in the latest paper is the phrase 'final rule,' something that the FCA has borrowed from the Americans in the last 18 months for a reason that its website does not explain. Its use of the term, as with many others, is vague and confusing. According to the spokeswoman, whenever a final rule first appears (as one did in the current policy paper, or 'policy statement,' on a subject that need not concern wealth specialists) it is not a rule at all, but the text of a rule that will come into force later, at a time the paper states. This month's policy paper also mentions 'finalised rules,' which suggests that this novel piece of jargon has yet to 'bed in' convincingly. Alongside this, various recent papers also mention other things such as 'interim rules' and 'near-final' rules - the spokeswoman said that these terms were just ways in which FCA people expressed themselves when talking about proposals for new rules. Only the term 'final rule' has a standard official meaning, she said.

Regulatory references are going to be required whenever candidates apply for the following jobs:

• senior management functions (SMFs) and significant harm functions (SHFs) - categories dreamt up especially for the Senior Managers and Certification Regime;
• Prudential Regulatory Authority senior insurance management functions (SIMF) - a piece of terminology that applies to the Senior Insurance Managers Regime (SIMR);
• FCA insurance controlled functions;
• notified non-executive directorships and NEDs in credit unions; and
• 'key function holders.'