TC 1
Application and Purpose
TC 1.1
Who, what and where?
- 01/01/2011
Who and what?
TC 1.1.1
See Notes
- 01/11/2007
- Past version of TC 1.1.1 before 01/11/2007
Where?
TC 1.1.2
See Notes
The territorial scope of this sourcebook
is set out in TC App 2.
- 01/11/2007
- Past version of TC 1.1.2 before 01/11/2007
Purpose
TC 1.1.3
See Notes
The competent employees rule is
the main Handbook requirement
relating to the competence of employees.
The purpose of this sourcebook is to support the FSA's supervisory function by supplementing
the competent employees rule for
retail activities.
- 01/11/2007
- Past version of TC 1.1.3 before 01/11/2007
Meaning of competence
TC 1.1.4
See Notes
In
this sourcebook, competence means having the skills, knowledge and expertise
needed to discharge the responsibilities of an employee's role.
This includes achieving a good standard of ethical behaviour.
- 01/11/2007
- Past version of TC 1.1.4 before 01/11/2007
TC 1.2
Actions for damages
- 01/01/2011
TC 1.2.1
See Notes
- 01/11/2007
- Past version of TC 1.2.1 before 01/11/2007
Export chapter as
TC 2
Competence
TC 2.1
Assessing and maintaining competence
- 01/01/2011
Assessment of competence and supervision
TC 2.1.1
See Notes
- (1) A firm must not assess an employee as competent to carry on an activity in TC Appendix 1 until the employee has demonstrated the necessary competence to do so and has (if required by TC Appendix 1) attained each module of an appropriate qualification. This assessment need not take place before the employee starts to carry on the activity.
- (2) A firm may assess an employee who is subject to, but has not satisfied, an appropriate qualification requirement as competent to the extent that:
- (a) that employee works in a branch in an EEA State other than the United Kingdom;
- (b) the employee is engaging in MiFID business; and
- (c) there is no appropriate qualification or equivalent in that EEA State.
- 01/01/2011
- Past version of TC 2.1.1 before 01/01/2011
TC 2.1.2
See Notes
A firm must not allow an employee to carry on an activity in TC Appendix 1 without appropriate supervision.
- 01/11/2007
- Past version of TC 2.1.2 before 01/11/2007
TC 2.1.3
See Notes
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.
- 01/11/2007
- Past version of TC 2.1.3 before 01/11/2007
Supervisors
TC 2.1.4
See Notes
Firms should ensure that those supervising employees carrying on an activity in TC Appendix 1 have the necessary coaching and assessment skills as well as technical knowledge to act as a competent supervisor and assessor. In particular firms should consider whether it is appropriate to require those supervising employees not assessed as competent to attain an appropriate qualification as well except where the employee is giving advice on
packaged products, see TC 2.1.5 R.
TC 2.1.5
See Notes
Where an employee is giving advice on
packaged products
to retail clients and has not been assessed as competent to do so, the firm must ensure that the individual supervising and assessing that employee has attained an appropriate qualification.
Qualification requirements before starting activities
TC 2.1.6
See Notes
A firm must ensure that an employee does not carry on an activity in TC Appendix 1 (other than an overseeing activity) for which there is a qualification requirement without first attaining the relevant regulatory module of an appropriate qualification.
- 01/01/2011
- Past version of TC 2.1.6 before 01/01/2011
TC 2.1.7
See Notes
A firm must ensure that an employee does not carry on any of the following activities without first attaining each module of an appropriate qualification:
- (1) [deleted]
- (1A) advising on and dealing in securities which are not stakeholder pension schemes or broker funds;
- (1B) advising on and dealing in derivatives;
- (2) the activity of a broker fund adviser;
- (3) advising on syndicate participation at Lloyd's; or
- (4) the activity of a pension transfer specialist.
Exemption from appropriate qualification requirements
TC 2.1.9
See Notes
- (1) If a firm is satisfied that an employee meets the conditions in this rule then the requirements to have attained each module of an appropriate qualification will only apply if that employee is carrying on one of the activities specified in this rule.
- (2) The conditions are that a firm should be satisfied that an employee:
- (a) has at least three years' up-to-date relevant experience in the activity in question obtained while employed outside the United Kingdom;
- (b) has not previously been required to comply fully with the relevant qualification requirements in TC 2.1.1 R; and
- (c) has passed the relevant regulatory module of an appropriate qualification;
- but (b) and (c) do not apply to an employee who is benefiting from the "30-day rule" exemption in SUP 10.10.7B R, unless the employee benefits from that rule because he is advising retail clients on packaged products or is a broker fund adviser.
- (3) The relevant activities are:
- (a) advising on investments which are packaged products, if that advice is given to retail clients;
- (b) the activity of a broker fund adviser;
- (c) advising on syndicate participation at Lloyd's; or
- (d) the activity of a pension transfer specialist.
Selecting an appropriate qualification
TC 2.1.10
See Notes
- (1) This rule applies for the purposes of TC 2.1.1 R, TC 2.1.5 R, TC 2.1.6 R, TC 2.1.7 R, TC 2.1.9 R, TC 2.2A.1 R, TC 2.2A.3 R and TC 2.2A.6 R.
- (2) To ensure that a qualification is appropriate, a firm should select an appropriate qualification from the list of qualifications set out in TC Appendix 4E.
- (3) Contravention of (2) may be relied on as tending to establish contravention of the rules referred to in (1).
- 01/01/2011
- Past version of TC 2.1.10 before 01/01/2011
TC 2.1.10A
See Notes
TC Appendix 5G sets out:
- (1) the criteria which the FSA may take into account when assessing a qualification provider; and
- (2) the information the FSA will expect the qualification provider to provide if it asks the FSA to add a qualification to the list of appropriate qualifications in TC Appendix 4E.
- 01/01/2011
TC 2.1.10B
See Notes
- (1) TC Appendix 6G sets out guidance in relation to accredited bodies.
- (2) TC Appendix 7G sets out guidance on gap-filling in relation to appropriate qualifications and the function of accredited bodies in that regard.
- 01/02/2011
Training needs
TC 2.1.11
See Notes
Firms should ensure that their employees' training needs are assessed at the outset and at regular intervals (including if their role changes). Appropriate training and support should be provided to ensure that any relevant training needs are satisfied. Firms should also review at regular intervals the quality and effectiveness of such training.
- 01/11/2007
Maintaining competence
TC 2.1.12
See Notes
A firm must review on a regular and frequent basis employees' competence and take appropriate action to ensure that they remain competent for their role.
- 01/11/2007
TC 2.1.13
See Notes
- 01/01/2011
- Past version of TC 2.1.13 before 01/01/2011
TC 2.1.14
See Notes
A firm may choose to establish, implement and maintain a training and competence scheme.
- 01/01/2011
TC 2.1.15
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.15 after 31/12/2012
TC 2.1.16
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.16 after 31/12/2012
TC 2.1.17
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.17 after 31/12/2012
TC 2.1.18
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.18 after 31/12/2012
TC 2.1.19
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.19 after 31/12/2012
TC 2.1.20
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.20 after 31/12/2012
TC 2.1.21
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.21 after 31/12/2012
TC 2.1.22
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.22 after 31/12/2012
TC 2.1.23
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.23 after 31/12/2012
TC 2.1.24
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.24 after 31/12/2012
TC 2.1.25
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.25 after 31/12/2012
TC 2.1.26
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.26 after 31/12/2012
TC 2.1.27
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.27 after 31/12/2012
TC 2.1.28
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.28 after 31/12/2012
TC 2.1.29
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.29 after 31/12/2012
TC 2.1.30
See Notes
[to follow]
- 01/07/2011
- Future version of TC 2.1.30 after 31/12/2012
Notification requirements
TC 2.1.31
See Notes
A firm must notify the FSA as soon as reasonably practicable after it becomes aware, or has information which reasonably suggests, that any of the following events has occurred or may have occurred in relation to any of its retail investment advisers, and the event is significant:
- (1) a retail investment adviser, who has been assessed as competent for the purposes of TC 2.1.1 R, is no longer considered competent for those purposes;
- (2) a retail investment adviser has failed to attain an appropriate qualification within the time limit prescribed by TC 2.2A.1R (1);
- (3) a retail investment adviser has failed to comply with a Statement of Principle in carrying out his controlled function; and
- (4) a retail investment adviser has performed an activity in TC Appendix 1 before having demonstrated the necessary competence for the purposes of TC 2.1.1 R and without appropriate supervision.
- 01/07/2011
TC 2.1.32
See Notes
When considering whether an event is significant a firm should include the following in its considerations:
- (1) the potential risk of consumer detriment as a result of the event;
- (2) whether the event or a pattern of events indicate recurrent issues in relation to one or more retail investment advisers; and
- (3) its obligations under Principle 11.
- 01/07/2011
TC 2.1.33
See Notes
The Retail Investment Adviser Competence Notification Form approved by the FSA for notifications under TC 2.1.31 R may be found at the FSA's website www.fsa.gov.uk/Pages/Doing/Regulated/Notify/index.shtml.
- 01/07/2011
TC 2.2A
Time limits
- 01/01/2011
Calculation of time limits for attaining an appropriate qualification
TC 2.2A.1
See Notes
- (1) For the purposes of TC 2.1.1 R, if an employee carries on an activity in TC Appendix 1 (other than an overseeing activity), a firm must ensure that the employee attains an appropriate qualification within 30 months of starting to carry on that activity.
- (2) For the purposes of (1), a firm must record the date on which the employee starts to carry on that activity.
- 01/01/2011
TC 2.2A.2
See Notes
For the purposes of calculating the 30 months referred to in TC 2.2A.1 R, a firm must:
- (1) aggregate periods of time spent carrying on the activity during different periods of employment; and
- (2) disregard any period of 60 business days or more during which the employee is not carrying on the activity due to being continuously absent from work.
- 01/01/2011
TC 2.2A.3
See Notes
- 01/01/2011
TC 2.2A.4
See Notes
- 01/01/2011
TC 2.2A.5
See Notes
Firms may wish employees who carry on an overseeing activity specified in TC Appendix 1 to attain an appropriate qualification within 30 months of starting the activity.
- 01/01/2011
Record-keeping
TC 2.2A.6
See Notes
A firm should, for the purposes of TC 3.1.1 R (Record keeping), make and retain records of the time limits within which the appropriate qualification has been attained.
- 01/01/2011
TC 3
Record Keeping
TC 3.1
Record-keeping requirements
- 01/01/2011
TC 3.1.1
See Notes
A firm must make appropriate records to demonstrate compliance with the rules in this sourcebook and keep them for the following periods after an employee stops carrying on the activity:
- (1) at least 5 years for MiFID business;
- (2) 3 years for non-MiFID business; and
- (3) indefinitely for a pension transfer specialist.
- 01/11/2007
TC App 1
TC Appendix 1
TC App 1.1
Activities and Products/Sectors to which TC applies subject to TC Appendices 2 and 3
- 01/01/2011
TC App 1.1.1
See Notes
| Activity | Products/Sectors | Is there an appropriate qualification requirement? |
|
| Designated investment business carried on for a retail client | |||
| Providing basic advice | 1. | Stakeholder products excluding a deposit-based stakeholder product | No |
| Advising | 2. | Securities which are not stakeholder pension schemes or broker funds | Yes |
| 3. | Derivatives | Yes | |
| 4. | Packaged products which are not broker funds | Yes | |
| 5. | Friendly Society life policies where the employee is not reasonably expected to receive a remuneration of greater than £1000 a year in respect of such sales | No | |
| 6. | Friendly Society tax-exempt policies | Yes | |
| 7. | Long-term care insurance contracts | Yes | |
| 8. | Investments in the course of corporate finance business | Yes | |
| 9. | Advising on syndicate participation at Lloyd's | Yes | |
| Undertaking the activity in column 2 | 10. | Broker fund adviser | Yes |
| 11. | Pension transfer specialist | Yes | |
| Advising and dealing | 12. | Securities which are not stakeholder pension schemes or broker funds | Yes |
| 13. | Derivatives | Yes | |
| Dealing | 13A | Securities which are not stakeholder pension schemes or broker funds | No |
| 13B | Derivatives | No | |
| Managing | 14. | Investments | Yes |
| Overseeing on a day-to-day basis | 15. | Operating a collective investment scheme or undertaking the activities of a trustee or depositary of a collective investment scheme | Yes |
| 16. | Safeguarding and administering investments or holding client money | Yes | |
| 17. | Administrative functions in relation to managing investments | Yes | |
| 18. | Administrative functions in relation to effecting or carrying out contracts of insurance which are life policies | Yes | |
| 19. | Administrative functions in relation to the operation of stakeholder pension schemes | Yes | |
| Regulated mortgage activity and reversion activity carried on for a customer | |||
| Advising | 20. | Regulated mortgage contracts for a non-business purpose | Yes |
| 21. | Equity release transactions | Yes | |
| Designing scripted questions for non-advised sales | 22. | Equity release transactions | Yes |
| Overseeing non-advised sales on a day-to-day basis | 23. | Equity release transactions | Yes |
| Non-investment insurance business carried on for a consumer | |||
| Advising | 24. | Non-investment insurance contracts | No |
| Regulated sale and rent back activity carried on for a customer | |||
| Advising | 25. | Regulated sale and rent back agreements | No |
| Overseeing non-advised sales on a day-to-day basis | 26. | Regulated sale and rent back agreements | No |
| Notes: | |||
| 1. | In the Appendix the heading and types of business specified in the headings are to be read in conjunction with the paragraphs appearing beneath them. | ||
| 2. | Thus, for example, paragraph 24 consistent with the heading above it, refers only to advice on non-investment insurance contracts given to a consumer. | ||
TC App 2
Appendix 2
TC App 2.1
TCs Territorial Scope subject to the limitation in TC Appendix 3
- 01/01/2011
TC App 2.1.1
See Notes
| UK domestic firm | Incoming EEA firm | Overseas firm (other than an incoming EEA firm) | |
| MiFID business and equivalent third country business | TC applies in respect of employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom and TC also applies insofar as an activity is carried on from an establishment maintained by the firm (or its appointed representative or, where applicable, its tied agent) in, and within the territory of, another EEA State |
TC does not apply | TC applies in respect of employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom |
| Insurance mediation activities | TC applies in respect of employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom and TC also applies in respect of employees who engage in or oversee activities from a branch established in another EEA state |
TC does not apply | TC does not apply |
| Regulated mortgage activity and reversion activity | TC applies if the customer is resident in the United Kingdom at the time the regulated mortgage activity or reversion activity is carried on and TC also applies if the customer is resident in another EEA State (at the time that the activity is carried on) but only if the activity is carried on from an establishment maintained by the firm or its appointed representative in the United Kingdom |
Same as for UK domestic firm | Same as for UK domestic firm |
| Any other activity in Appendix 1 | TC applies in respect of employees who carry on these activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom and TC also applies in respect of employees who carry on activities with or for a client in the United Kingdom |
TC applies in respect of its employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom | TC applies in respect of its employees who carry on activities from an establishment maintained by the firm (or its appointed representative) in the United Kingdom |
- 01/11/2007
TC App 3
Appendix 3
TC App 3.1
Circumstances in which TC does not apply
- 01/01/2011
TC App 3.1.1
See Notes
| Type of firm/activity | Application |
| Incoming EEA firm | This sourcebook does not apply where responsibility for any matter it covers is reserved by an EU instrument to the firm's Home State regulator |
| Incoming Treaty firm | This sourcebook does not apply where responsibility for any matter it covers is reserved by an EU instrument to the firm's Home State regulator |
| UCITS qualifier | This sourcebook only applies where it is relevant to the manner in which a firm communicates or approves a financial promotion |
| Authorised professional firm | TC does not apply with respect to its non-mainstream regulated activities (see PROF 5.2) |
| Incoming ECA provider | TC does not apply to an incoming ECA provider acting as such. |
TC App 4
Appropriate Qualification tables
TC App 4.1
Appropriate Qualification tables
- 01/01/2011
TC App 4.1.1
See Notes
TC Appendix 4E -
Appropriate Qualification tables
TC App 5
Appropriate qualification criteria
TC App 5.1
- 01/01/2011
TC App 5.1.1
See Notes
| Introduction | |||
| 1. | TC Appendix 4E contains a list of appropriate qualifications for the purposes of TC 2.1.10 E. | ||
| 2. | This Appendix sets out: | ||
| (1) | the criteria which the FSA may take into account when assessing a qualification provider; and | ||
| (2) | the information the FSA will expect the qualification provider to provide if it asks the FSA to add a qualification to the list of appropriate qualifications in TC Appendix 4 E. | ||
| Criteria for assessing a qualification provider | |||
| 3. | The FSA will expect the qualification provider of an appropriate qualification to have, in the FSA's opinion: | ||
| (1) | assessors and qualification developers who are trained and qualified; | ||
| (2) | valid, reliable and robust assessment methods; | ||
| (3) | robust governance and a clear separation of function between its qualification services and any other services it performs, including effective procedures for managing any conflicts of interest; | ||
| (4) | procedures for reviewing and refreshing its syllabus and question banks to ensure that they are relevant and up to date; | ||
| (5) | robust and credible procedures for assessing a candidate's demonstration of the learning outcomes specified in the relevant examination standards; | ||
| (6) | robust arrangements for contingency and business continuity planning in relation to its qualification services; | ||
| (7) | appropriate records management procedures in relation to its qualification services; | ||
| (8) | procedures for dealing with inappropriate conduct by candidates, for example, attempting to obtain or obtaining qualifications dishonestly; | ||
| (9) | robust procedures for the setting of assessments and marking of results; and | ||
| (10) | adequate resources in order to be financially viable. | ||
| Information about the qualification to be provided to the FSA | |||
| 4. | If a qualification provider asks the FSA to add a qualification to the list of appropriate qualifications in TC Appendix 4 E, the FSA will expect the qualification provider to: | ||
| (1) | where relevant, specify the qualifications framework within which the qualification is placed; | ||
| (2) | specify the activity in TC Appendix 1 to which the qualification relates; | ||
| (3) | set out the recommended prior knowledge, attainment or experience for candidates; | ||
| (4) | where relevant, set out the exemption policy for a candidate's prior learning or achievement; | ||
| (5) | provide the relevant learning materials to the FSA together with an explanation of how those learning materials correspond to the content of the most recent examination standards. Any content of the examination standards which has been excluded from the learning materials must be justified; | ||
| (6) | where applicable, explain how grading is applied; | ||
| (7) | where applicable, explain the provider's rules of combination; | ||
| (8) | provide details of expected learning hours or any other similar arrangements; | ||
| (9) | where applicable, specify the level of the overall qualification with reference to the relevant qualification framework or, if there is no relevant qualification framework, the European Qualifications Framework and the percentage of the qualification at that level, as well as the percentages and the levels for the remainder of the qualification; | ||
| (10) | provide details of any credit for prior learning included in the qualification together with an explanation of how it meets the most recent examination standards; and | ||
| (11) | provide an explanation of how the qualification compares in quality and standard to other similar qualifications. | ||
| Information about the qualification provider to be provided to the FSA | |||
| 5. | When considering whether to include or retain a qualification in the list of appropriate qualifications, the FSA may consider, where relevant: | ||
| (1) | whether the qualification provider has in place suitable arrangements for: | ||
| (a) | meeting its statutory duties in relation to equality and diversity; and | ||
| (b) | reducing barriers to learning, for example, for candidates with learning difficulties; | ||
| (2) | any concerns, issues or investigations which have been raised by the qualification provider's qualifications regulator; | ||
| (3) | the annual pass rates of each of the relevant qualifications; | ||
| (4) | the quality of the service the qualification provider provides to candidates in relation to qualifications and its complaints procedures; | ||
| (5) | how the qualification provider maintains its qualifications to ensure they remain comparable to other qualifications in the same sector; and | ||
| (6) | whether the qualification provider gives candidates reasonable notice of any syllabus change, change in method of assessment or pass standards; | ||
| (7) | information supporting the criteria in TC Appendix 5G paragraph 3. | ||
- 01/01/2011
TC App 6
Accredited bodies
TC App 6.1
Accredited bodies
- 01/02/2011
TC App 6.1.1
See Notes
| Introduction | ||
| 1. | An accredited body is a body recognised by the FSA to act as an accredited body. | |
| 2. | Information on accredited bodies, including guidance on the process for including an applicant body in the list, is set out below and the obligation to pay the application fee is set out in FEES 3.2. | |
| 3. | The role of an accredited body relates to rules in TC which come into force on 31 December 2012. | |
| Process for including a body in the list of accredited bodies | ||
| 4. | In considering the compatibility of a proposed addition with the regulatory objectives, the FSA will determine whether the applicant will, if accredited, contribute to securing an appropriate degree of protection for consumers having regard in particular to: | |
| (1) | the matters set out in paragraphs 10 to 20; and | |
| (2) | the rules and practices of the applicant. | |
| 5. | An application to the FSA to be added to the list of accredited bodies should set out how the applicant will satisfy the criteria in paragraphs 10 to 20. The application should be accompanied by a report from a suitable auditor which sets out its independent assessment of the applicant's ability to meet these criteria. An application form is available from the FSA upon request. | |
| 6. | When considering an application for accredited body status the FSA may: | |
| (1) | carry out any enquiries and request any further information that it considers appropriate, including consulting other regulators; | |
| (2) | ask the applicant or its specified representative to answer questions and explain any matter the FSA considers relevant to the application; | |
| (3) | take into account any information which the FSA considers appropriate to the application; and | |
| (4) | request that any information provided by the applicant or its specified representative is verified in such a manner as the FSA may specify. | |
| 7. | The FSA will confirm its decision in writing to the applicant. | |
| 8. | The FSA will enter into an agreement with the applicant or accredited body which will specify the requirements that the accredited body must meet. These will include the matters set out in paragraphs 10 to 20. Approval as an accredited body becomes effective only when the name of the applicant is added to the Glossary definition of accredited body. | |
| 9. | Paragraphs 10 to 20 set out the criteria which an applicant should meet to become an accredited body and which an accredited body should meet at all times. | |
| Acting in the public interest and furthering the development of the profession | ||
| 10. | The FSA will expect an accredited body to act in the public interest, to contribute to raising consumer confidence and professional standards in the retail investment advice market and to promoting the profession. | |
| Carrying out effective verification services | ||
| 11. | If independent verification of a retail investment adviser's professional standards has been carried out by an accredited body, the FSA will expect the accredited body to provide the retail investment adviser with evidence of that verification in a durable medium and in a form agreed by the FSA. This is referred to in this Appendix and TC 2.1.28 R as a 'statement of professional standing'. | |
| 12. | The FSA will expect an accredited body to have in place effective procedures for carrying out its verification activities. These should include: | |
| (1) | verifying that each retail investment adviser who is a member of or subscriber to the accredited body's verification service has made an annual declaration in writing that the retail investment adviser has, in the preceding 12 months, complied with APER and completed the continuing professional development required; | |
| (2) | verifying annually the continuing professional development records of no less than 10% of the retail investment advisers who have used its service in the previous 12 months to ensure that the records are accurate and the continuing professional development completed by the retail investment advisers is appropriate; and | |
| (3) | verifying that, if required by TC, the retail investment advisers who use its services have attained an appropriate qualification. This should include, where relevant, checking that appropriate qualification gap-fill records have been completed by the retail investment advisers. | |
| 13. | The FSA will not expect an accredited body to carry out the verification in paragraph 12(3) if a retail investment adviser provides the accredited body with evidence in a durable medium which demonstrates that another accredited body has previously verified the retail investment adviser's appropriate qualification, including, where relevant, appropriate qualification gap-fill. | |
| 14. | The FSA will expect an accredited body to make it a contractual condition of membership (where a retail investment adviser is a member of the accredited body) or of using its verification service (where a retail investment adviser is not a member of the accredited body) that, as a minimum, the accredited body will not continue to verify a retail investment adviser's standards and will withdraw its statement of professional standing if the accredited body is provided with false information in relation to a retail investment adviser's qualifications or continuing professional development or a false declaration in relation to a retail investment adviser's compliance with APER. In this regard, an accredited body must have in place appropriate decision-making procedures with a suitable degree of independence and transparency. | |
| Having appropriate systems and controls in place and providing evidence to the FSA of continuing effectiveness | ||
| 15. | The FSA will expect an accredited body to ensure that it has adequate resources and systems and controls in place in relation to its role as an accredited body. | |
| 16. | The FSA will expect an accredited body to have effective procedures in place for the management of conflicts of interest and have a well-balanced governance structure with at least one member who is independent of the sector. | |
| 17. | The FSA will expect an accredited body to have a code of ethics and to ensure that its code of ethics and verification service terms and conditions do not contain any provisions that conflict with APER. | |
| Ongoing cooperation with the FSA | ||
| 18. | The FSA will expect an accredited body to provide the FSA with such documents and information as the FSA reasonably requires, and to cooperate with the FSA in an open and transparent manner. | |
| 19. | The FSA will expect an accredited body to share information with the FSA (subject to any legal constraints) in relation to the professional standards of the retail investment advisers who use its service as appropriate. Examples might include conduct issues, complaints, dishonestly obtaining or falsifying qualifications or continuing professional development or a failure to complete appropriate continuing professional development. The FSA will expect an accredited body to notify the firm if issues such as these arise. | |
| 20. | The FSA will expect an accredited body to submit to the FSA an annual report by a suitable independent auditor which sets out that auditor's assessment of the quality of the body's satisfaction of the criteria in paragraphs 10 to 19 in the preceding 12 months and whether, in the auditor's view, the body is capable of satisfying the criteria in the subsequent 12 months. The FSA will expect this annual report to be submitted to the FSA within three months of the anniversary of the date on which the accredited body was added to the Glossary definition of accredited body. | |
| Withdrawal of accreditation | ||
| 21. | If an accredited body fails or, in the FSA's view, is likely to fail to satisfy the criteria, the FSA will discuss this with the accredited body concerned. If, following a period of discussion, the accredited body has failed to take appropriate corrective action to ensure that it satisfies and will continue to satisfy the criteria, the FSA will withdraw the accredited body's accreditation by removing its name from the list of accredited bodies published in the Glossary. The FSA will expect the body to notify each retail investment adviser holding a current statement of professional standing of the FSA's decision. A statement of professional standing issued by the accredited body before the withdrawal of accreditation will continue to be valid until its expiration. | |
TC App 7
Guidelines for qualification gap-fill for retail investment advice
TC App 7.1
Guidelines for qualification gap-fill for retail investment advice
- 01/02/2011
TC App 7.1.1
See Notes
TC Appendix 7G - Guidelines for qualification gap-fill for retail investment advice
Transitional Provisions and Schedules
TC TP 1
Designated Investment Business: Assessments of competence before commencement
TC TP 1.1
| 1.1 | R | (1) | This rule applies in respect of an employee of a firm employed at commencement who had, before commencement, been assessed as competent by a firm in accordance with the applicable rules of its previous regulator. |
| (2) | An employee described in (1) is exempt from the requirements in this sourcebook to attain an appropriate qualification if the activity (or role of a supervisor) carried on by that employee after commencement is the same or substantially the same as that for which the employee had been assessed as competent before commencement. |
TC TP 1.2
| 1.2 | R | If an employee of a firm is exempted from a qualification requirement under TC TP 1.1R and any other firm subsequently employs the individual, that exemption continues to apply in respect of that subsequent employment on the same basis provided that: | |
| (1) | the activity which the employee carries on (or the role of the supervisor) continues to be the same, or substantially the same, as that in respect of which the employee had previously enjoyed the benefit of the exemption; and | ||
| (2) | the individual had not experienced any significant break in employment since the last employment in respect of which the individual had the benefit of an exemption under TC TP 1. | ||
- 01/01/2011
- Past version of TC TP 1 before 01/01/2011
TC TP 2
Designated Investment Business: Assessments of competence in 12 month period after commencement
| 2.1 | R | (1) | This rule applies in respect of an employee who had, on 31 October 2007, the benefit of an exemption under transitional rule 2 in TC TP 1.1R in the form it was in on 31 October 2007. |
| (2) | An employee described in (1) is exempt from the requirements in this sourcebook to attain an appropriate qualification but only in respect of the activities in respect of which the employee had the benefit of that exemption as at 31 October 2007. | ||
| 2.2 | R | If an employee of a firm is exempted from a qualification requirement under TC TP 2.1R and any other firm subsequently employs the individual, that exemption continues to apply in respect of that subsequent employment on the same basis provided that: | |
| (1) | the activity which the employee carries on continues to be the same, or substantially the same, as that in respect of which the employee had previously enjoyed the benefit of the exemption; and | ||
| (2) | the individual had not experienced any significant break in employment since the last employment in respect of which the individual had the benefit of an exemption under TC TP 2. | ||
| 2.3 | G | At 31 October 2007 transitional rule 2 in TC TP 1.1R applied to a firm whose employees at commencement had not been subject to any specific training and competence requirements of a previous regulator. This rule allowed the firm to assess such individuals as competent in the first twelve months after commencement without their having to pass an exam. The exemption applied only in respect of the activities which the individual was able to carry on before commencement where they were the same or substantially the same. | |
- 01/01/2011
- Past version of TC TP 2 before 01/01/2011
TC TP 3
Regulated Mortgage Contracts: Assessments of competence under the Mortgage Code Compliance Board Rules
| 3.1 | R | (1) | This rule applies: | |
| (a) | in relation to regulated mortgage contracts; and | |||
| (b) | in respect of an individual employed by a firm at 31 October 2004. | |||
| (2) | If the individual described in (1) was assessed as competent by the firm before 31 October 2004 in accordance with the rules of the Mortgage Code Compliance Board applying immediately before 31 October 2004, the individual is exempt from the requirements in this sourcebook to attain an appropriate qualification provided that: | |||
| (a) | the activity which the individual carries on continues to be the same, or substantially the same, as that immediately before 31 October 2004; and | |||
| (b) | the individual had not experienced any significant break in employment since the last employment in respect of which the individual had the benefit of an exemption under this rule. | |||
| 3.2 | R | If an employee of a firm is exempted from a qualification requirement under TC TP 3.1R and any other firm subsequently employs the individual, that exemption continues to apply in respect of that subsequent employment on the same basis provided that: | ||
| (1) | the conditions in TC TP 3.1R(2)(a) and (b) are met; and | |||
| (2) | the firm assesses the individual to be competent in accordance with TC 2.1.1 R. | |||
- 01/01/2011
- Past version of TC TP 3 before 01/01/2011
TC TP 4
Home Reversion Plans: Assessments of competence before 6 April 2007 in relation to lifetime mortgages
| 4.1 | R | (1) | This rule applies in respect of an individual employed by a firm at 6 April 2007, if that individual had before that date been assessed as competent by the firm in relation to: | |
| (a) | advising on lifetime mortgages; | |||
| (b) | designing scripted questions for use in non-advised sales to customers of lifetime mortgages; or | |||
| (c) | overseeing non-advised sales of lifetime mortgages. | |||
| (2) | An individual in (1) is exempt from the qualification requirements in this sourcebook in relation to activities carried on concerning home reversion plans that correspond to those in (1) provided that: | |||
| (a) | the individual has been assessed as competent to apply the knowledge and skills necessary to carry on the relevant home reversion activity before 6 April 2007; | |||
| (b) | the home reversion activity which the individual carries on continues to be the same, or substantially the same as that which the individual carried on immediately before 6 April 2007; and | |||
| (c) | the individual had not experienced any significant break in employment since the last employment in respect of which the individual had the benefit of an exemption under this rule. | |||
| 4.2 | R | If an employee of a firm is exempted from a qualification requirement under TC TP 4.1R and any other firm subsequently employs the individual, that exemption continues to apply in respect of that subsequent employment on the same basis provided that: | ||
| (1) | the conditions in TC TP 4.1R(2)(b) and (c) are met; and | |||
| (2) | the firm assesses the individual to be competent in accordance with TC 2.1.1 R. | |||
| 4.3 | R | TC TP 4 does not apply to an individual in TC TP 4.1R(1) after 6 April 2009 unless the individual passes an appropriate home reversions top-up examination before that date. | ||
- 01/01/2011
- Past version of TC TP 4 before 01/01/2011
TC TP 5
Home Reversion Plans: Assessments of competence before 6 April 2007 in relation to Home Reversion Plans only
| 5.1 | R | (1) | This rule applies in respect of an individual employed by a firm at 6 April 2007 (other than an individual described in TC TP 4.1R). | |
| (2) | The individual in (1) is exempt from the examination requirements in this sourcebook in relation to the following: | |||
| (a) | advising on home reversion plans; | |||
| (b) | designing scripted questions for use in non-advised sales to customers of home reversion plans; or | |||
| (c) | overseeing non-advised sales of home reversion plans. | |||
| (3) | The exemption in (2) only applies if: | |||
| (a) | the individual has been assessed as competent to apply the knowledge and skills necessary to engage in or oversee the relevant home reversion activity before 6 April 2007; | |||
| (b) | the home reversion activity which the individual carries on continues to be the same, or substantially the same as that immediately before 6 April 2007; and | |||
| (c) | the individual had not experienced any significant break in employment since the last employment in respect of which the individual had the benefit of an exemption under this rule. | |||
| 5.2 | R | If the individual has not passed an appropriate examination before 6 April 2009, the individual in TC TP 5.1R(1) will cease to be exempt from the appropriate examination requirement. | ||
| 5.3 | R | If an employee of a firm is exempted from an examination requirement under TC TP 5.1R and any other firm subsequently employs the individual, that exemption continues to apply in respect of that subsequent employment on the same basis provided that: | ||
| (1) | the conditions in TC TP 5.1R3(b) and (c) are met; and | |||
| (2) | the firm assesses the individual to be competent in accordance with TC 2.1.1 R. | |||
- 01/11/2007
TC TP 6
Transitional provisions relating to assessments of competence generally
| 6.1 | G | If appropriate, a firm may treat a competence assessment carried out under TC in the form it was in before 1 November 2007 as being sufficient to satisfy TC 2.1.1 R. | ||
- 01/11/2007
TC TP 7
Transitional provisions relating to waivers from existing examination requirements
| 7.1 | R | (1) | This provision applies to a firm which benefited from a waiver from an examination requirement in TC prior to 1 November 2007 in respect of an employee. If such a firm would otherwise find itself in breach of an examination requirement in TC from that date as a result of the re-categorisation of clients in COBS, the firm may allow that employee to continue carrying on the activities in respect of which the waiver was granted until 31 October 2008 though he has yet to satisfy the relevant examination requirement in TC. | |
| (2) | If an employee of a firm is exempted from an examination requirement under TC TP 7.1(1) and any other firm subsequently employs the individual, that exemption continues to apply in respect of that subsequent employment on the same basis provided that: | |||
| (a) | the activity which the employee carries on continues to be the same, or substantially the same, as that in respect of which the employee had previously enjoyed the benefit of the exemption; and | |||
| (b) | the employee had not experienced any significant break in employment since the last employment in respect of which the relevant exemption was granted. | |||
- 01/11/2007
TC TP 8
Transitional provisions relating to time limits for attaining qualifications
| 8.1 | R | An employee who is carrying on an activity specified in TC Appendix 1 on 1 January 2011 will, for the purposes of TC 2.2A.1 R, be regarded as starting to carry on that activity on that date. |
- 01/01/2011
TC Sch 1
Record keeping requirements
- 01/01/2011
TC Sch 1.1
See Notes
| TC 3.1.1 R provides: | |
| A firm must make appropriate records to demonstrate compliance with the rules in this sourcebook and keep them for the following periods after an employee stops carrying on the activity: | |
| (1) | at least 5 years for MiFID business; |
| (2) | 3 years for non-MiFID business; and |
| (3) | indefinitely for a pension transfer specialist. |
- 01/11/2007
- Past version of TC Sch 1.1 before 01/11/2007
TC Sch 2
Notification requirements
- 01/01/2011
TC Sch 2.1
See Notes
| Handbook reference | Matter to be notified | Contents of notification | Trigger event | Time allowed |
| TC 2.1.31 R | Notifications - issues relating to the competency and behaviour of retail investment advisers. | (1) Information about any circumstances relevant to the issue; and (2) information about any steps which a firm has taken or intends to take to rectify the position or prevent any future potential occurrence. |
Becoming aware, or having information which reasonably suggests that any of the following has occurred or may occur, and the event is significant: | As soon as reasonably practicable. |
| (1) a retail investment adviser, who has been assessed as competent for the purposes of TC 2.1.1 R, is no longer considered competent for the purposes of TC 2.1.1 R; | ||||
| (2) a retail investment adviser has failed to attain an appropriate qualification within the time limit prescribed by TC 2.2A.1 R (1); | ||||
| (3) a retail investment adviser has failed to comply with a Statement of Principle in carrying out his controlled function; and | ||||
| (4) a retail investment adviser has performed an activity in TC Appendix 1 before having demonstrated the necessary competence for the purposes of TC 2.1.1 R and without appropriate supervision. |
TC Sch 3
Fees and other required payments
- 01/01/2011
TC Sch 3.1
See Notes
| There are no requirements for fees or other payments in TC. |
- 01/11/2007
- Past version of TC Sch 3.1 before 01/11/2007
TC Sch 4
Powers exercised
- 01/01/2011
TC Sch 4.1
See Notes
- 01/11/2007
- Past version of TC Sch 4.1 before 01/11/2007
TC Sch 4.2
See Notes
- 01/12/2004
TC Sch 5
Rights of action for damages
- 01/01/2011
TC Sch 5.1
See Notes
| The table below sets out the rules in TC contravention of which by an authorised person may be actionable under section 150 of the Act (Actions for damages) by a person who suffers loss as a result of the contravention. |
- 01/11/2007
- Past version of TC Sch 5.1 before 01/11/2007
TC Sch 5.2
See Notes
| If a "Yes" appears in the column headed "For private person?", the rule may be actionable by a "private person" under section 150 (or, in certain circumstances, his fiduciary or representative). A "Yes" in the column headed "Removed" indicates that the FSA has removed the right of action under section 150(2) of the Act. If so, a reference to the rule in which it is removed is also given. |
- 01/12/2004
TC Sch 5.3
See Notes
| The column headed "For other person?" indicates whether the rule is actionable by a person other than a private person (or his fiduciary or representative). If so, an indication of the type of person by whom the rule is actionable is given. |
- 01/12/2004
TC Sch 5.4
See Notes
Table: Actions for damages: Training and Competence sourcebook
| Right of action under section 150 | |||||
| Chapter/Appendix | Section/Annex | Paragraph | For private person | Removed | For other person |
| Rules in TC | No | Yes TC 1.2.1 R | No | ||
- 01/11/2007
- Past version of TC Sch 5.4 before 01/11/2007
TC Sch 6
Rules that can be waived
- 01/01/2011
TC Sch 6.1
See Notes
| As a result of regulation 10 of the Regulatory Reform (Financial Services and Markets Act 2000) Order 2007 (SI 2007/1973) the FSA has power to waive all its rules, other than rules made under section 247 (Trust scheme rules) or section 248 (Scheme particulars rules) of the Act. However, if the rules incorporate requirements laid down in European directives, it will not be possible for the FSA to grant a waiver that would be incompatible with the United Kingdom's responsibilities under those directives. |
- 06/01/2011
- Past version of TC Sch 6.1 before 06/01/2011