Heads of compliance and MLROs

Most successful applicants will have completed relevant training before applying to us. We're less likely to approve individuals who haven't completed necessary courses when they apply (even if they intend to after they become authorised).

Relevant training means courses that are:

• relevant to the type of business of the firm that the candidate is applying to work for
• recent and up to date, ie with relevant knowledge of the current regulatory rules and expectations
  • where training happened several years ago, we may ask if the candidate has since supplemented their training with continuous professional development (CPD) courses
• detailed enough to give the individual the knowledge to carry out the role – short ‘introductory’ courses, on their own, don't provide enough coverage or depth to be useful for a head of compliance or MLRO, even in the smallest firms

We don't endorse or recommend any courses or training providers, or prescribe the form training should take – whether that’s classroom-based courses, e-learning or course books/materials. However, we have found courses with an examination or assessment are better for demonstrating that an individual has gained relevant knowledge.

We recognise that showing a candidate's relevant experience can come in many forms. Past successful applicants come from a range of backgrounds and experience – including in compliance and legal teams, lawyers, accountants and consultants.

Applicants don't need to have held head of compliance or MLRO positions before to be successful, but it can help if they've held more junior compliance roles in the past, such as compliance manager or deputy MLRO. It can also help if they've held a similar approved position before – but this doesn't guarantee we'll approve them.

Applicants who have only previously worked in a front-line role, and have had less training an experience, usually don't have the skills and knowledge to hold a compliance function.

In some smaller firms, it may be appropriate and proportionate for the owner and/or chief executive to hold these functions themselves. However, we still expect those individuals to have relevant training and experience to ensure their business will comply with the relevant rules and regulations for their firm.

Sometimes firms choose to get compliance support from external advisors such as lawyers or compliance consultants. These advisors might help with their application or the ongoing running of their compliance function. This isn't a requirement but some firms find it helps with their in-house arrangements.

However, if external support like this is your firm's only compliance resource, we will probably refuse your application.

Any individual at your firm who is accountable for a compliance or MLRO function should have sufficient knowledge and experience themselves to make relevant compliance decisions for the business, know when to seek advice and know how to implement advice received.

Whoever performs a compliance or MLRO function must commit sufficient time to the role. Applicants who only intend to spend a few hours a week on it tend to be unsuccessful.

Many business have a full-time person who is responsible for these functions. Smaller firms may propose that an individual carries out the role on a part-time basis – and we have sometimes accepted this – but their commitment to the role must be proportionate and sufficient.

If the proposed head of compliance or MLRO has another role within the firm or externally, we will also want to understand any conflicts of interest. For example, successful applicants tend to be independent from the client-facing side of the business because one of their responsibilities will be to to oversee the client-facing business.

Other factors we consider include:

• the physical location where the applicant will be based – ideally, they will work from the firm’s principal place of business in the UK
• whether the applicant is a senior leader within the business, such as a company director – because if they aren't, even if they have experience and knowledge we might question whether they have the incentives or authority needed to be effective in these roles

Even if an applicant believes they have sufficient experience or training, we may still request an interview to test this.