FCA—training and competence

The following Financial Services practice 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?
Activities and products/sectors to which TC applies
Who is an ‘employee’?
Territorial scope
Circumstances in which TC does not apply
MiFID investment firms and third country investment firms
Firms carrying on insurance distribution activities

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What does the Training and Competence regime require?
Assessment of competence
MiFID investment firms and third-country investment firms
Firms carrying on insurance distribution activities
Employees who have not yet satisfied a qualification requirement
Supervision
MiFID investment firms and third country investment firms
Qualification requirements before starting activities
Appropriate qualifications
Exemption from appropriate qualification requirements
Time limits for attaining an appropriate qualification
Knowledge and competence requirements for specific activities
Knowledge and competence requirements before starting MCD credit agreement activities
Knowledge and competence requirements when advising on P2P agreements
Knowledge and competence requirements for pension transfer specialists
Training
Maintaining competence
Continuing professional development
Annual declarations by retail investment advisers
Statements of professional standing
Notification requirements
Reporting requirements
Record-keeping requirements
Firms carrying on insurance distribution activities

FCA—training and competence

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

This Practice Note explains the Financial Conduct Authority (FCA) training and competence 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 training and competence regime consists of:

•
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
•
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

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