The regulator has also published a Memorandum of Understanding between itself and the Financial Services Skills Council and David Kenmir, FSA Managing Director of Regulatory Services, has taken up a position on the FSSC Board.
These changes place a clear responsibility on the senior management of firms for ensuring that their staff are equipped to meet the standards of competence required to perform their roles. They carry forward proposals outlined in CP194: Amendments to the Training and Competence sourcebook: including consultation on Competencies for Mortgage Advisers. They are:
* To move from 'approved' to 'appropriate' examinations
The shift away from prescription is consistent with the FSA's wider, principles-based approach to regulation. It reinforces senior management responsibility, a cornerstone of the FSA's regime, for ensuring the competence of their staff. It also gives firms greater flexibility in deciding which exams should be used as part of the assessment of an individual's competence. The change will not come into force until 1 July 2004, once the Financial Services Skills Council has gained its full licence and published a list of appropriate exams;
* To allow firms to reduce the length of time they keep T&C records, if they wish
Currently, firms must keep these records for at least three years after an employee has ceased to work for the firm. The amended rule means that firms need only keep T&C records for three years after an individual has stopped doing, or overseeing, the relevant role. The records of pensions transfer specialists must continue to be retained indefinitely.
* To clarify the position regarding supervision of sole traders or firms with only one practitioner, director or partner doing a regulated activity
Additional guidance now acknowledges that the pragmatic solution to supervision for these individuals may be self-supervision and that firms should make whatever arrangements are appropriate in the circumstances.
The changes to the record keeping rule and supervision guidance will come into effect on 1 May 2004.
Mortgage exams
Feedback on draft syllabi for exams to be taken in relation to standard mortgages and lifetime mortgages has been passed on to the FSSC who are responsible for ensuring that appropriate exams are in place in time for the start of mortgage regulation. This work relates to those advisers who will be new to the role - employees who have already been assessed as competent under Mortgage Code Compliance Board (MCCB) requirements will be 'grandfathered' in for the purposes of T&C.
Once mortgage regulation starts, an employee training to advise on standard mortgages must take an appropriate exam within two years. The same timeframe will apply to employees training to advise on lifetime mortgages, oversee the sale of lifetime mortgages or design scripted questions for use in non-advised sales of lifetime mortgages. An employee who has previously qualified to advise on standard mortgages and is now seeking to do any of the activities related to lifetime mortgages will also have two years to pass the additional module for lifetime mortgages.
