FCA—training and competence
FCA—training and competence

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • FCA—training and competence
  • The competent employees rule
  • Knowledge and competence
  • When does the Training and Competence sourcebook apply?
  • What does the Training and Competence regime require?
  • Assessment of competence
  • Supervision
  • Qualification requirements before starting activities
  • Time limits for attaining an appropriate qualification
  • Knowledge and competence requirements for specific activities
  • more

This Practice Note explains the Financial Conduct Authority's (FCA) Training and Competence (TC) regime. The regime supports the FCA's consumer protection objective, which aims to ensure that employees who deal with customers in the regulated financial services market are competent and suitably qualified to do so.

The TC regime consists of:

  1. a high-level competence requirement (the ‘competent employees rule’) which applies to individuals engaged in the regulated activity in all UK-authorised firms (including wholesale firms) as set out in the Senior Management Arrangements Systems and Controls sourcebook (SYSC), and

  2. more detailed requirements for certain retail activities, including the need to attain a qualification where relevant, as set out in the Training and Competence sourcebook (TC)

The competent employees rule

A firm must employ personnel with the skills, knowledge and expertise necessary for the discharge of the responsibilities allocated to them. This is known as the 'competent employees rule'. The competent employees rule is set out in:

  1. SYSC 3.1.6 R for insurers

  2. Article 21(1)(d) of Commission Delegated Regulation (EU) 2017/565 (the MiFID II Organisational Regulation) for common platform firms, and

  3. SYSC 5.1.1 R for all other firms

When complying with the competent employees rule, a firm must take into account the nature, scale and complexity of its business and the nature and range of financial services and activities undertaken in the course of