Interim Compliance Officer vs Permanent Hire: When to Use

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Interim vs Permanent Compliance Hires: When Each Makes Sense

Last updated: 10 November 2026

Key takeaways

An interim compliance officer suits remediation, gap cover during a permanent search, and preparatory work before an application.
A permanent hire suits regulator-approved functions where continuity matters, because the regulator assesses the person and expects them to stay.
The FCA says an interim MLRO in a crypto registration prevents it from assessing the permanent MLRO.
FIAU guidance requires the MLRO to be an officer in employment with the firm or an executive director; VARA requires its Compliance Officer to be a full-time employee.
Structure interim cover with a defined scope, an end date and a planned handover to the permanent hire.

An interim compliance officer can save you months when a gap opens or a project needs expert hands quickly. But in regulated firms, some compliance roles are approved by the regulator as individuals, and a short-term contractor may not be acceptable in them. The choice between interim and permanent depends on the role, the regulator and what you need the person to do.

This guide is for founders, COOs and HR leads at fintech, crypto and iGaming firms deciding how to fill a compliance gap. It covers when each option works, what regulators say, and how to structure a handover.

When an interim makes sense

Remediation projects. After a regulatory finding, an audit or a skilled person review, you may need someone to fix specific issues to a deadline: rewrite policies, clear a backlog of reviews, rebuild a risk assessment. An interim with remediation experience can do this alongside the permanent team.

Covering a gap while the permanent search runs. When a compliance lead resigns or is absent, an interim keeps the work going. This works best when the interim is not expected to hold a regulator-approved function for long, or when the regulator's rules allow temporary cover.

Preparatory work before an application. An interim can help design the framework, draft documents and choose tools. But for roles the regulator will assess as part of the application, check whether the regulator expects the permanent person to be named.

When you need a permanent hire

Regulator-approved functions. Where the regulator assesses the individual, such as an MLRO, a Compliance Officer or a senior manager, it will look at the person's competence, reputation, conflicts and time commitment. Replacing that person soon after approval means another assessment, and a pattern of short tenures can raise questions. For what regulators check, see Key Function Holders: What Regulators Check Before Approving a Hire.

Continuity matters. Relationships with the regulator, banks and auditors, and knowledge of past decisions, build up over time. A permanent hire keeps them in the firm.

The licence depends on it. At application stage, the person in the key compliance role often writes or owns the documents the regulator reviews. See Hiring a Head of Compliance for a Crypto Company Applying for a Licence.

Interim compliance officer vs permanent hire: what regulators say

Regulator	What the rules say	What it means for an interim
FCA (UK), crypto registration	The FCA says an interim MLRO put forward in an application prevents it from assessing the permanent MLRO; it expects the MLRO to be the permanent one	Name the permanent MLRO in the application
FCA (UK), senior managers	The 12-week rule allows cover for a temporary or reasonably unforeseen absence without prior approval, for less than 12 weeks in a consecutive 12-month period	Short cover is possible; longer cover needs an approval application
FIAU (Malta)	The MLRO must be an officer in employment with the firm or an executive director; the employment need not be exclusive or full-time	A pure consultancy contract may not meet the condition
VARA (Dubai)	The Compliance Officer and each Responsible Individual must be a full-time employee and fit and proper as approved by VARA	A short-term contractor is unlikely to meet the condition for those roles

The FCA's 12-week rule sits in SUP 10C of its Handbook and has been amended over time, so check the current text before relying on it. If it becomes clear that the cover will last longer, the firm should apply for approval.

Need compliance cover now and a permanent hire next?

Send us the job description and we will plan the permanent search around your interim arrangement and your regulator's rules.

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The hidden risk: the regulator's view of a contractor in a key role

Even where the rules do not prohibit it, a key function held by a short-term contractor can raise questions: Will the person be there next quarter? Do they know the business well enough? Do they hold other appointments that compete for their time? FIAU guidance, for example, asks firms to consider the number of appointments an MLRO holds and the time they can dedicate to each.

Before you rely on an interim in a key role, ask the regulator or check its published guidance, and record why the arrangement is adequate. For the MLRO role in particular, see How to Hire an MLRO for a Crypto or Fintech Company.

What to look for in an interim compliance officer

The best interims are specialists who can start producing in the first week:

A track record of the same kind of project. Remediation, a framework build or gap cover in a similar business and under the same regulator.
Comfort with handover. Ask how they documented work for their successor in previous assignments, and ask that successor for a reference if you can.
No conflicting appointments. Check what else they are working on and how many days a week they can give you.
Clear limits. A good interim will ask which decisions they own and which stay with the board or the approved function holder.

Treat the interim's first week like an audit: ask for a written view of the biggest gaps and a plan for the assignment. It shows quickly whether you hired the right person.

How to structure interim cover with a handover

Define the scope. List what the interim will do and what they will not: for example, run monitoring and draft policies, but not sign off suspicious activity reports if they are not the approved MLRO.
Set an end date. Tie it to the permanent hire's expected start, with a buffer for notice periods.
Start the permanent search at the same time. Do not wait for the interim to settle in.
Plan an overlap. A few weeks where the interim hands over documents, open issues, tool configurations and regulator correspondence.
Keep records. Decisions, rationale and open actions in one place, so the permanent hire inherits a clear file.

What we recommend

Check which compliance roles in your firm the regulator approves, and what it says about temporary or contractor arrangements.
Use an interim for remediation, short gap cover or preparatory work, not as a long-term holder of an approved function.
For roles named in a licence application, hire the permanent person before you submit.
Run the interim and the permanent search in parallel, with a defined handover.
Document why any interim arrangement in a key role is adequate, in case the regulator asks.

FAQ

When does an interim compliance officer make sense?

Interim compliance hires work well for remediation projects, for covering a gap while a permanent search runs, and for preparatory work before a licence application. They work less well where the role is a regulator-approved function that needs continuity, because the regulator may assess the person and expect them to stay.

Can an interim MLRO be named in an FCA crypto registration?

The FCA has said that putting forward an interim MLRO in a cryptoasset registration prevents it from assessing the fitness and propriety of the permanent MLRO. It expects the MLRO to be heavily involved in preparing the application and to be the permanent MLRO if the firm is registered.

Can someone cover a senior manager role in the UK without FCA approval?

The FCA's 12-week rule allows a firm to appoint someone to cover a senior management function without prior approval where the absence is temporary or reasonably unforeseen, for less than 12 weeks in a consecutive 12-month period. If it becomes clear the cover will last longer, the firm should apply for approval. Check the current Handbook text, as the rule has been amended over time.

Can a Malta MLRO be a contractor?

FIAU guidance says the MLRO must be an officer in employment with the subject person or an executive director. The employment relationship need not be exclusive or full-time, but the firm must consider the number of appointments, the time the MLRO can dedicate and possible conflicts of interest.

Can a VARA Compliance Officer be interim?

VARA's rules require the Compliance Officer and each Responsible Individual to be a full-time employee of the VASP, and both must be fit and proper as approved by VARA. A short-term contractor arrangement is unlikely to meet those conditions for those roles.

How do I structure interim cover with a handover to a permanent hire?

Agree a defined scope and end date for the interim, start the permanent search at the same time, and plan an overlap so the interim hands over documents, open issues and regulator correspondence. Make clear in the contract which decisions the interim can make and who signs off.

The bottom line

An interim compliance officer is a good tool for projects and short gaps, but regulator-approved roles usually need a permanent person who the regulator can assess and who will stay. Plan the permanent hire from the first day of the interim. Hirexel recruits permanent compliance, AML and risk hires for fintech, crypto, blockchain and iGaming firms, and can run the permanent search alongside your interim arrangement.

Planning interim cover or a permanent compliance hire?

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