Consultation on Implementation of Mandatory Reference Checking Scheme to Address the “Rolling Bad Apples” Phenomenon

HKMA has issued a circular to seek the industry’s comments on the consultation paper on the implementation of the Mandatory Reference Checking (“MRC”) scheme to address the “Rolling Bad Apples” (“RBA”) phenomenon.

Taking into account the relevant work done by international bodies, the HKMA has been exploring ways to address the issue of the RBA phenomenon in the banking sector in Hong Kong, and has initiated discussions with AIs to gauge their views on the subject through the Balanced and Responsive Supervision (“BRS”) initiative. Based on the previous feedback from the industry, the consultation paper proposes a framework for the MRC scheme to be adopted by AIs related to the employment of specified positions within the banking sector, with the aim to establish a common protocol for reference checking.