I’ve heard it said before… “The FCA have got bigger fish to fry, they aren’t going to be looking into how our business operates. There are only 400 of us and we are not a fixed portfolio firm with a named supervisor. We think they have probably forgotten who we are since they authorised us…..”
The FCA has recently published its business plan for 2020/21, setting out its strategic focus for the next three years.
As you might expect in the current climate, it’s shorter than usual, with a focus on potential market disruption caused by COVID-19, but still manages to convey key areas of concern.
Pandemic, Senior Manager Accountabilities and flexibility are not really a selection of words that anyone would have envisioned being joined together only a few months ago...
CONCON 4.2 SC1: "You must take reasonable steps to ensure that the business of the firm for which you are responsible is controlled effectively"
"You can delegate authority but you can not delegate responsibility"
Former U.S. Senator Byron Dorgan
KNOWLEDGE – “Facts, information and skills acquired through experience or education. The theoretical or practical understanding of a subject”
COMPETENCE - “The ability to do something successfully or efficiently”
Appropriate and effective competence frameworks have been a regulatory requirement in Financial Services since the early 1990’s. The concept of T&C was introduced back in the early 90’s by LAUTRO and then refined by the PIA and FSA over the late 1990’s and 2000’s. More recently however, T&C has taken a bit of back seat to more recent regulation, such as MIFID II Knowledge and Competence requirements, the Insurance Distribution Directive and the Senior Managers & Certification Regime. However, these newer regimes all have the same underlying theme, and that is to ensure that organisations have structured and effective processes so that employees have the knowledge and competence necessary for them to fulfil their roles effectively. Therefore, whilst not necessarily grabbing the headlines, the concept of structured and effective T&C regimes remain at the forefront of our regulator’s approach to managing employee competence.
This series of three blogs is designed to help you review the fitness of your T&C or wider competence management arrangements. We aim to challenge you to consider whether your current approach is fit for purpose.
Training & Competence (T&C) has been a regulatory requirement of the Financial Conduct Authority (FCA) since the late 1990’s. As such, it doesn’t grab the headlines the way more recent regulation, such as MIFID II Knowledge and Competence, Insurance Distribution Directive and Senior Managers & Certification Regime have. However, these newer regimes all have the same underlying theme, that being key staff have, and evidence, the knowledge and competence necessary for them to fulfil their jobs effectively. As a result, activities like regular performance reviews, ‘on the job’ observations, programmes of continuing professional development (CPD) and robust record keeping supported by effective monitor have never been more relevant. Therefore, whilst not necessarily grabbing the headlines, never have the principles and underlying activities of T&C been more relevant.