Background Check Compliance

ASIC’s requirements are outlined in Regulatory Guide 105 – Licensing: Organisation Competence and focus on undertaking a police check and bankruptcy check, as well as equivalent international checks where certain criteria applies.

ASIC-regulated companies have specific background checking requirements (“people proofs”) to adhere to for their nominated Responsible Managers/Officers. Such background checks include Police Check, Bankruptcy Checks, copies of Qualifications and two written ASIC business references.

APRA’s requirements are intended to confirm that nominated Responsible Persons are “Fit and Proper” to hold their role by undertaking checks including: police checks, employment & qualification verifications, banned persons checks, bankruptcy checks, directorship checks, work rights validations & international checks where relevant.

AUSTRAC’s regulation of financial services under the AML/CTF Act includes recommendations for employee and customer due diligence, referred to as Know Your Employee (KYE) and Know Your Customer (KYC). KYE is background checking for employees and covers aspects such as verifying identity, employment history, criminal record, bankruptcy and an international watch lists check of global databases and sanctions lists (including PEP – Politically Exposed Persons) that assists with identifying the risks associated with individuals.

Relevant to listing/listed entities, background checking for compliance with the ASX includes screening directors for their character, experience, education, criminal record and bankruptcy history, as well as identifying any material directorships, with a requirement to run international police checks and international bankruptcy checks where certain criteria applies.

Under the Aged Care Act 1997, police check guidelines were implemented in 2007 and then strengthened in 2009, requiring individuals with access to the elderly to be screened for criminal records every 3 years, by undertaking a police check with a partial exclusion for offences relating to vulnerable persons.