FSA updates training and competence regime

Training and Competence is an important part of the regulatory framework setting the standards of competence, knowledge and skills that individuals working in financial services must achieve. For example, a firm must assess an employee as competent before that individual can advise customers, without supervision. One element of this assessment includes passing an FSA approved exam. CP194 Amendments to the Training and Competence Sourcebook proposes:

• revising the requirement to pass an FSA approved examination to one that it is appropriate;

• removing the list of approved exams from the FSAs handbook; and

• that firms can rely on examinations listed by the Skills Council for Financial Services as being appropriate.

Currently, any new qualifications need to be approved by the FSA and consultation is required before the rules can be changed to let firms use them. Under todays proposals firms will either be able to rely on The Skills Councils list of appropriate exams or make their own decision based on the needs of their firm and its customers. The FSA will work closely with The Skills Council to ensure that its standards are reflected in The Skills Council list of appropriate exams. It will also continue to work with firms to ensure that they are adopting appropriate standards.

Chris Rexworthy, Head of Industry Training and Themes in the FSAs Investment Firms Division said:

"Todays proposals re-focus the emphasis in the Handbook on our high level requirements for assessing competence. This fits with our wider approach to regulation, in which we are encouraging firms and their senior management to make more decisions for themselves on the right controls for their business."

"Ensuring that competent people are providing financial services is a major part of building confidence in the financial system and ultimately, of protecting consumers. To help employees get to grips with our Training and Competence requirements, we have produced a new CD Rom which includes interviews with our incoming Chief Executive, John Tiner and enforcement director, Andrew Procter."

Mortgage exams When mortgage regulation is implemented on 31 October 2004, new entrants will have to pass an exam before they can advise on standard mortgages. An exam will also be required for advised sales of lifetime mortgages. For non-advised sales of lifetime mortgages, those people who design scripted questions and who supervise the staff asking scripted questions will have to pass an exam. Those advisers who have already met the Mortgage Code Compliance Boards fitness and competence requirements will not be required to retake exams.

CP194 contains proposals on possible content for the mortgage modules. The lifetime mortgage exam proposes to cover home reversion schemes. The FSA will pass feedback on to the Skills Council, which will be responsible for developing an appropriate exam.

The FSA welcome comments on CP194 by 30 November 2003. The FSAs inaugural Training and Competence conference -T&C 2003: A new era - will be held on Tuesday 16 December.

Notes for editors

1. For more details about the FSAs Training and Competence (T&C) distance learning package see www.fsa.gov.uk/doing/events.

2. CP194 Amendments to the Training and Competence Sourcebook: including consultation on competencies for mortgage advisers can be found at www.fsa.gov.uk.

3. For further details about the T&C conference contact Kathy McCall on 020 7066 9010.

4. The Sector Skills Council for Financial Services is now in development and hopes to get its licence early next year. Sector Skills Councils are government-promoted, independent, employer-led, organisations in industry sectors of economic significance. For further information please ring 020 7216 7366 or see www.fssc.org.uk

5. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection of consumers; and fighting financial crime.

6. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.