HKMA’s Mandatory Reference Checks Phase 2: What You Need To Know

On July 25, 2025, the Hong Kong Monetary Authority (“HKMA”) released a circular confirming their phase 2 rollout of Mandatory Reference Checking (MRC). The phase 2 stage of the scheme takes effect from September 30, 2025, and requires all banks and Authorized Institutions (employers regulated by the Hong Kong Monetary Authority) to conduct employment verifications on a wider scope of staff members. 

This scheme (phase 1 and 2) was created to address the “rolling bad apples” phenomenon. A “rolling bad apple” is an individual who changes firms, or changes roles within a firm, without disclosing previous misconduct or conduct that violates a firm’s policies, norms, or values.

Key Changes in Phase 2 

Why This Matters

Published in May 2022, the scheme was designed to ensure that conduct-related information is shared between institutions during recruitment, thereby strengthening ethical standards and integrity across the financial sector in Hong Kong. These financial services firms that operate in the region are expected to foster an environment where trust, transparency, and compliance are non-negotiable.

Challenges in Scaling MRC Phase 2 Across the Workforce 

With the implementation of Phase 2, organisations face heightened obligations to prevent misconduct from being repeated across the sector in a much wider workforce. However, operational challenges may arise if employers don’t effectively implement the scheme, such as: 

• Delays caused by waiting for reference responses. 
• Cross-border challenges when the candidate has international experience. 
• Data privacy and consent management across jurisdictions. 
• Gaps in due diligence for individuals who may have recorded misconducts outside of the listed roles.  

How will the MRC Phase 2 Affect Hiring?  

With the scheme having been in place for the past three years, organisations have developed a familiarity with the additional steps involved in the hiring process. The challenge now lies in each organisation’s ability to implement the scheme across a broader range of staff roles, expanding beyond the senior positions initially covered.  

What Are the Mandatory Requirements? 

To comply with the MRC Scheme, institutions must collect and submit:

• Authorisation Form  
• 7-Year Employment History 
• Candidate’s Full Name 
• Date of Birth 
• Residential Address 
• Contact Number 
• First Four (4) Digits of HKID 
• Signed MRC Information Sharing
  Consent form

What Are the Next Steps to Consider? 

• Partner with a trusted background check provider to conduct the reference checks required under the MRC Scheme on your organisation’s behalf. This helps minimise the time and resources your in-house HR team would otherwise need to manage, especially with the added number of workers your business might need to review. 
• Implement rescreening of your current workforce to ensure ongoing compliance with the MRC Scheme requirements and to reduce the risk from those individuals who may pose regulatory or reputational damage. 
• Realigning your hiring process to meet HKMA requirements under the MRC Scheme and establishing robust background check practices, not only to roles required in line with compliance obligations, but also to other positions across the workforce to help mitigate wider risk.    

Our General Approach to Reference Checks: 

1. Employer orders a candidate background check. 
2. The employer asks the candidate to complete a reference check form and consent form. It is typically recommended that employers request three (3) professional references.  
3. Once the candidate has completed the forms, they submit it to the employers. 
4. The employer forwards the completed forms to First Advantage.  
5. The First Advantage operations team individually contacts each referee provided on the form, conducting an approximately 10 to 15-minute interview with each referee, using a standard script. 
6. Results are immediately entered into our standard report and available for employer review. 

The Strategic Value of Background Screening  

While the Mandatory Reference Checks (MRC) Scheme confirms whether misconduct has been recorded by past employers in Hong Kong’s banking sector, it does not capture the full picture. By integrating thorough background screening into your hiring process alongside the MRC process, your organisation can go further by adhering to best practice and supporting smarter hiring decisions.  

How Can We Help?  

With advanced technology and AI-powered platforms, First Advantage transforms the background screening process into a seamless, efficient experience for customers and candidates. Operating in over 200 countries and territories, our global software, data, and regional expertise enable us to be a one-stop shop. First Advantage brings innovation, automation, scalability, and customer success to the forefront, modernising the way businesses hire smarter and onboard faster.  

Need help aligning your background screening process with MRC requirements? 

Start with smart screening. Contact our experts today to learn more.