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TC 2.1 Assessing and maintaining competence13

Assessment of competence and supervision

TC 2.1.1RRP
  1. (1)

    13A firm must not assess an employee as competent to carry on an activity in TC Appendix 1 until the employee has demonstrated the necessary competence to do so and has (if required by TC Appendix 1) passedeach module of an appropriate examination. This assessment need not take place before the employee starts to carry on the activity.14

    13
  2. (2)

    A firm may assess an employee who is subject to, but has not satisfied, an appropriate examinationrequirement as competent to the extent that:14

    1. (a)

      that employee works in a branch in an EEA State other than the United Kingdom;14

    2. (b)

      the employee is engaging in MiFID business; and14

    3. (c)

      there is no appropriate examinationor equivalent in that EEA State.14

TC 2.1.2RRP

A firm must not allow an employee to carry on an activity in TC Appendix 1 without appropriate supervision.

TC 2.1.3GRP

Firms should ensure that employees are appropriately supervised at all times. It is expected that the level and intensity of that supervision will be significantly greater in the period before the firm has assessed the employee as competent, than after. A firm should therefore have clear criteria and procedures relating to the specific point at which the employee is assessed as competent in order to be able to demonstrate when and why a reduced level of supervision may be considered appropriate. At all stages firms should consider the level of relevant experience of an employee when determining the level of supervision required.

Supervisors

TC 2.1.4GRP

Firms should ensure that those supervising employees carrying on an activity in TC Appendix 1 have the necessary coaching and assessment skills as well as technical knowledge to act as a competent supervisor and assessor. In particular firms should consider whether it is appropriate to require those supervising employees not assessed as competent to passan appropriate examinationas well except where the employee is giving advice on packaged products, see TC 2.1.5 R.

TC 2.1.5RRP

Where an

employee is giving advice on packaged products to retail clients and has not been assessed as competent to do so, the firm must ensure that the individual supervising and assessing that employee has passedan appropriate examination.

Examination requirements before starting activities

Qualification requirements before starting activities

TC 2.1.6RRP

A firm must ensure that an employee does not carry on an activity in TC Appendix 1 (other than an overseeing activity) for which there is an examinationrequirement without first passing the relevant regulatory module

of an appropriate examination.

TC 2.1.7RRP

A firm must ensure that an employee does not carry on any of the following activities without first passingeach module of an appropriate examination:

  1. (1)

    "advising and dealing" activities in TC Appendix 1;

  2. (2)

    the activity of a broker fund adviser;

  3. (3)

    advising on syndicate participation at Lloyd's; or

  4. (4)

    the activity of a pension transfer specialist.

TC 2.1.8G

Where there is an examination requirement, firms may wish to impose limits on the time they allow their employees to pass an appropriate examination or place limits on the number of times the examination can be taken.

Exemption from appropriate examination requirements

TC 2.1.9RRP
  1. (1)

    If a firm is satisfied that an employee meets the conditions in this rule then the requirements to have passedeach module of an appropriate examinationwill only apply if that employee is carrying on one of the activities specified in this rule.

  2. (2)

    The conditions are that a firm should be satisfied that an employee:

    1. (a)

      has at least three years' up-to-date relevant experience in the activity in question obtained while employed outside the United Kingdom;

    2. (b)

      has not previously been required to comply fully with the relevant examinationrequirements in TC 2.1.1 R; and

    3. (c)

      has passed the relevant regulatory module of an appropriate examination;

    but (b) and (c) do not apply to an employee who is benefiting from the "30-day rule" exemption in SUP 10.10.7B R, unless the employee benefits from that rule because he is advising retail clients on packaged products or is a broker fund adviser.

  3. (3)

    The relevant activities are:

    1. (a)

      advising on investments which are packaged products, if that advice is given to retail clients;

    2. (b)

      the activity of a broker fund adviser;

    3. (c)

      advising on syndicate participation at Lloyd's; or

    4. (d)

      the activity of a pension transfer specialist.

Selecting an appropriate examination

TC 2.1.10ERP
  1. (1)

    This rule applies for the purposes of TC 2.1.1 R, TC 2.1.5 R, TC 2.1.6 R, TC 2.1.7 R andTC 2.1.9 R.

  2. (2)

    In ensuring that an examination is appropriate, a firm should select an appropriate examination from the list of examinations maintained by The Financial Services Skills Council.

  3. (3)

    Compliance with (2) may be relied on as tending to establish compliance withthe rules referred to in (1).

Training needs

TC 2.1.11GRP

Firms should ensure that their employees' training needs are assessed at the outset and at regular intervals (including if their role changes). Appropriate training and support should be provided to ensure that any relevant training needs are satisfied. Firms should also review at regular intervals the quality and effectiveness of such training.

Maintaining competence

TC 2.1.12RRP

A firm must review on a regular and frequent basis employees' competence and take appropriate action to ensure that they remain competent for their role.

TC 2.1.13GRP

A firmshould ensure that maintaining competence for an employeetakes into account such matters as:

  1. (1)

    technical knowledge and its application;

  2. (2)

    skills and expertise; and

  3. (3)

    changes in the market and to products, legislation and regulation.