Competence

Part

TC Training and Competence

Chapter

Competence

Printed on: 01/11/2024

Rulebook at: 01/07/2011

TC 2

Competence

TC 2.1

Assessing and maintaining competence

01/01/2011

Assessment of competence and supervision

TC 2.1.1

(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

TC 2.1.2

A firm must not allow an employee to carry on an activity in TC Appendix 1 without appropriate supervision.

01/11/2007

TC 2.1.3

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

Supervisors

TC 2.1.4

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.

01/01/2011

TC 2.1.5

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.

01/01/2011

Qualification requirements before starting activities

TC 2.1.6

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

TC 2.1.7

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.

01/01/2011

Exemption from appropriate qualification requirements

TC 2.1.9

(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.

01/01/2011

Selecting an appropriate qualification

TC 2.1.10

(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

TC 2.1.10A

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

(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

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

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

A firm should ensure that maintaining competence for an employee takes into account such matters as:

(1) technical knowledge and its application;
(2) skills and expertise; and
(3) changes in the market and to products, legislation and regulation.

01/01/2011

TC 2.1.14

A firm may choose to establish, implement and maintain a training and competence scheme.

01/01/2011

TC 2.1.15

[to follow]

01/07/2011

TC 2.1.16

[to follow]

01/07/2011

TC 2.1.17

[to follow]

01/07/2011

TC 2.1.18

[to follow]

01/07/2011

TC 2.1.19

[to follow]

01/07/2011

TC 2.1.20

[to follow]

01/07/2011

TC 2.1.21

[to follow]

01/07/2011

TC 2.1.22

[to follow]

01/07/2011

TC 2.1.23

[to follow]

01/07/2011

TC 2.1.24

[to follow]

01/07/2011

TC 2.1.25

[to follow]

01/07/2011

TC 2.1.26

[to follow]

01/07/2011

TC 2.1.27

[to follow]

01/07/2011

TC 2.1.28

[to follow]

01/07/2011

TC 2.1.29

[to follow]

01/07/2011

TC 2.1.30

[to follow]

01/07/2011

Notification requirements

TC 2.1.31

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

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

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

(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

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

A firm must ensure that any employee who does not attain an appropriate qualification within the specified time:

(1) ceases to engage in the activity to which that qualification would relate; and
(2) does not resume that activity without first attaining an appropriate qualification.

01/01/2011

TC 2.2A.4

Firms may wish their employees to attain an appropriate qualification within an earlier time limit or to place limits on the number of times that qualification can be taken.

01/01/2011

TC 2.2A.5

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

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