FSAs proposed approach for Training and Competence receives strong support

David Jackman, Head of Industry Training, said:

Consumer protection can only be achieved with a high degree of competence and firms need to be committed to best practice. To do this effectively individual firms need to adopt the most appropriate method of training and competence required for their business to meet their T&C obligations this approach has attracted overwhelming support.

We have identified a number of inconsistencies in the current regulatory examination requirements and we are now embarking on a comprehensive review of Approved Examinations activity by activity. Many respondents were surprised at the length and complexity of the list of interim approved examinations. We want to make sure that examinations are appropriate to an individuals job, relevant and up to date.

Main Policy Issues Identified

• The FSA plans to rationalise the existing examinations and ensure that they are appropriate to an individuals job role, relevant and up to date. The initial phase of the examination review focuses on investment advice where consumer protection issues are the most pressing. A first stage report is expected early next year. Timescales for passing Approved Examinations will differ depending on the complexity and frequency of the examinations so that firms and individuals have an incentive to reach the right knowledge standard within a reasonable time.

• The FSA aims to provide training for FSA staff and firms on T&C in order to ensure consistency of approach. The FSA will also provide more industry support including helplines and workshops. In addition, a generic Toolkit Template has been produced which trade bodies and institutes are being encouraged to develop to meet the needs of various sectors of the market.

• There was support for the rule extending the scope of standards for supervisors or overseers of administrative functions and some responses called for a further increase, in addition to the proposed rule. The FSA plans to retain the concept that the supervisor of the administrative function is the appropriate level of individual to fall within the Training & Competence framework.

• Concerns were raised that consumer protection measures were being applied unnecessarily to market counterparty business. This will not be the case. In a separate exercise we will consult on section 43 dealers and the appropriate approach to inter-professional markets.

New Draft Rules for comment

Two new sets of draft rules relating to record keeping and transitional arrangements are contained within the Feedback Statement and are open for consultation. The T&C record keeping rules are designed to enable firms to choose the most suitable methods of record keeping for their organisation while demonstrating compliance with FSA requirements.

The final T & C rules will be published in November 2000.

Notes for editors

1. The Training and Competence Consultation Paper (CP34) was issued in November 1999, following considerable discussion with industry bodies, institutes and firms, for comment by 29 February 2000.

2. The FSA received 260 written responses during the consultation period and more than 2,200 individuals attended the 24 roadshows.

3. While allowing some degree of flexibility in the implementation of Training & Competence all regulated firms will be required to meet a set of high level commitments.

4. The Feedback Statement to Consultation Paper 34: Training and Competence Sourcebook also includes two new sets of draft rules for consultation. The FSA would welcome comments on these draft rules by 8 September 2000.

5. Responses to the new draft rules can be sent via the FSA web-site at http://www.fsa.gov.uk/pubs/cp/60.

6. Examinations. The existing examinations applying to the existing regulatory bodies will be harmonised in the future to ensure a consistent set of standards throughout the industry. Over the next few years the FSA (guided by the Training Advisory Panel), together with other outside bodies, including the qualification authorities, National Training Organisations and relevant institutes will consider examination standards.