FCA T&C Rules Reminder


The importance of training in financial services is something that cannot be underestimated and especially with the introduction of guidance and rules coming out of the previous regulator's (Financial Services Authority) Retail Distribution Review (RDR). So with effect from the 31 December 2012 all individuals that wished to remain in an advisory role had to abide by strict regulatory requirements.

Advisers had to evidence that they had appropriate knowledge and qualifications to prove they were competent to advise.  Therefore, those new to advisory roles had to sit new qualifications. Those already in the industry that had some level of qualification were required to “gap fill” their knowledge.

Documentary evidence of structured “gap fill” training was required evidencing the following:

- What the learning gap was;
- The activity that was to be carried out to fill the knowledge gap; and
- Evidence of how the gap was filled.

Attendance at seminars, conferences, lectures, e-learning courses and workshops was all seen as acceptable.  Obtaining relevant CPD points and hours per year remains a regulatory requirement today.  

Individuals are still required to complete at least 35 hours per year of Continual Professional Development (CPD), 21 hours of which must be structured.

Evidence of CPD must be provided by accredited bodies that must also check a minimum of 10% of individual’s reports to ensure compliance.

Finding relevant structured courses and events, such as above, that fit the needs of individuals is no easy task though as each FS industry organisation that presents a set of courses and/or events does so in a different format that may or may not match the delegates search criteria e.g.  right event but wrong location, budget and/or theme.  This is where Industry Events Online can help delegates and interested parties.  Industry Events Online makes it easy to find what you want, when you want it on one easy to use website.

Financial Conduct Authority (FCA) Rules 

The RDR enhanced the existing Training & Competency (T&C) Manual and Rules within. 

TC 2.1.1 states:

“A firm must not assess an employee as competent to carry on an activity [………] until the employee has demonstrated the necessary competence to do so and has […..] attained each module of an appropriate qualification.”

The individual must attain such qualification “before the employee starts to carry on an activity”.

Supervisors must also ensure they are appropriately qualified to asses and individual giving advice as competent.

TC 2.1.2 states:

“Firms should ensure that employees are appropriately supervised at all times. It is expected that the level and intensity of that supervision will be significantly greater in the period before the firm has assessed the employee as competent, than after. A firm should therefore have clear criteria and procedures relating to the specific point at which the employee is assessed as competent in order to be able to demonstrate when and why a reduced level of supervision may be considered appropriate. At all stages firms should consider the level of relevant experience of an employee when determining the level of supervision required.”

TC 2.1.4  reiterates the importance that supervisors themselves must also be competent to assess an employee’s level of understanding and competence.  

Exemptions (TC 2.1.9) do apply for those who have met the qualification requirements but nevertheless they must still maintain annual CPD.

 

IEO Team

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