Activities and Exam Qualifications

Of relevance to:
Firms and their employees where appropriate qualifications are required under TC

The title of the FCA’s latest Consultation Paper CP16/24 “Review of the FCA’s appropriate qualification exam standards” neatly sums up its purpose.

SYSC 5 places a requirement on firms to employ personnel with appropriate skills, knowledge and expertise.  However additional requirements in the form of qualifications apply when certain activities are undertaken for retail clients (or ‘customers’ or ‘consumers’ in respect of certain mortgage-related activities, insurance business and sale and rent back activities).

The table in TC App 1.1 includes the activities – ranging from ‘advising’ to ‘overseeing on a day-to-day basis administrative functions in relation to managing investments’ – for which qualifications are required.

As to what qualifications are needed, recourse to the tables (Part 1 and Part 2) in TC Appendix 4.1 is required.

The tables can be a little daunting for those viewing them for the first time and therefore the changes proposed in CP16/24 which “… clarifies how to read and use the appropriate qualification tables ….” may be welcomed.

TC Appendix 4.1 will be rewritten so that there are separate tables for:

  • RDR Activity;
  • Non-RDR Activity (non-overseeing activity); and
  • Non-RDR Activity (overseeing activity)

Supporting Guidance and Evidential Provisions will be added to assist in understanding whether a qualification alone fully meets the appropriate qualification requirement or whether it has to be combined with one or two other qualifications.

The Consultation Paper also proposes revisions to the AES (“Appropriate Exam Standards”) – see Appendix 3. Although the FCA obviously does not offer appropriate qualifications (these are offered by the ‘qualification providers’ appearing in Part 2 of the table mentioned above), the content and level of such qualifications are prescribed through AES which are set by the FCA. CP16/24 emphasises that the revision to the AES reflects relevant developments since they were last reviewed; they do not introduce new qualification requirements or change the level of achievement needed to meet the rules on appropriate qualifications.

Comments are invited by 13 December 2016.