This included a shorter, simpler and more principles-based T&C Sourcebook.
Dan Waters, FSA director of retail policy, said: “The new T&C regime is the result of a comprehensive review of our T&C requirements, conducted as part of our move to more principles-based regulation. We believe the new regime will give firms more flexibility to achieve the outcomes we want in a way that suits them best. There is, though, no question of lowering the competence standards we expect of firms and their staff – these play a key role in protecting consumers.”
The new T&C regime comes into force on 1 November 2007. It is based on high-level rules and guidance, but will retain the existing exam requirements for retail business. This revision is part of the FSA's drive to simplify and streamline its Handbook.
The new regime, on which the FSA consulted in CP 07/4, will:
- introduce a new, overarching competence rule in the Senior Management Arrangements, Systems and Controls sourcebook which will apply to all UK authorised firms, including wholesale firms – this will replace the training and competence Commitments set out in the current T&C Sourcebook.
- replace the existing T&C sourcebook with a simpler, shorter, principles-based sourcebook for retail firms only which will be more outcome-focused and user-friendly and will comply with the Markets in Financial Instruments Directive (MiFID);
- retain the existing compulsory exam requirements for specified retail activities to maintain protection of retail consumers;
- retain the current 'safe harbour' for firms who use exams from the Financial Services Skills Council (FSSC)'s list of 'appropriate examinations'; and
- give due recognition to exams passed by employees of firms not subject to an exam requirement (e.g. those carrying out wholesale business) where they choose to use exams approved by the FSSC to demonstrate compliance with the knowledge element of the competence requirement.
