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TC 2.5 Appropriate examinations2

Time limits

TC 2.5.1R
  1. (1)

    A firm must ensure that an employee under supervision passes an appropriate examination within the time specified in TC 2.5.1A R, and, for this purpose, a firm must record the date on which the employee began engaging in or overseeing the relevant activity.2

  2. (2)

    For the purposes of calculating the time spent by an employee under supervision, a firm must:

    1. (a)

      aggregate periods of time spent engaging in or overseeing the activity during different periods of employment; and2

    2. (b)

      disregard any period of 60 business days or more during which the employee is continuously absent from engaging in or overseeing the activity.

  3. (3)

    A firm must ensure that any employee who does not pass an appropriate examination within the specified time:2

    1. (a)

      ceases to engage in or oversee the activity; and

    2. (b)

      does not resume the activity or oversee the activity without first passing an appropriate examination.2

TC 2.5.1AR

2The time limits to which TC 2.5.1 R applies

24

Activity in TC 2.1.4 G

Examination must be passed:

1.

(a)-(c)

before starting the activity

(d)-(e)

within 30 months of starting the activity

(f)-(g)

within two years of starting the activity

(h)

(no examination requirement)

(ha)-(l)3

within two years of starting the activity

(m)-(o)

before starting the activity

(p)-(q)

within two years of starting the activity

(r)

(no examination requirement)

(s)4

(no examination requirement)4

2.

(a)-(g)

within two years of starting the activity

TC 2.5.2G

A firm should, for the purposes of TC 2.8.1 R (Record keeping), make and retain records of the time limits within which the appropriate examination has been passed.2

Advising and dealing: restarting the activity

TC 2.5.3R

A firm must ensure that an employee does not recommence engaging in the activity of advising on investments which are, and dealing with or for clients in, securities (other than stakeholder pension schemes or broker funds), derivatives or both such securities and derivatives if:

  1. (1)

    the employee has not engaged in that activity for 12 months; and2

  2. (2)

    two years have elapsed since the employee passed an appropriate examination for that activity;2

unless the firm can demonstrate that the employee has sufficient experience and has kept his technical and regulatory knowledge up to date. If the firm cannot do so it must require the employee to pass an appropriate examination.2

TC 2.5.4G

A firm may regard an employee described in TC 2.5.3 R as having sufficient experience if the firm has determined that the individual has had at least three years' relevant experience in the past five years.

Exemption from the approved examination

TC 2.5.5R
  1. (1)

    Except as described in (2) and (3), if a firm is 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)

      had not previously been required to comply fully with the relevant examination requirements as stipulated in TC 2.4.5 R (1)(b)2; and

      2
    3. (c)

      has passed the relevant regulatory module of an appropriate examination;2

    then the requirement to have passed each module of an appropriate examination in 2TC 2.4.5 R (1)(b)2 does not apply for that employee.

    2
  2. (2)

    Paragraph 1 does not apply for an employee engaging in the following activities:

    1. (a)

      advising on investments which are packaged products, if that advice is given to private customers;

    2. (b)

      the activity of a broker fund adviser;

    3. (c)

      advising on syndicate participation at Lloyd's;

    4. (d)

      the activity of a pension transfer specialist.

  3. (3)

    Paragraphs (1)(b) and (c) do not apply for an employee who would perform:

    1. (a)

      the investment adviser function; or

    2. (b)

      the corporate finance adviser function; or

    3. (c)

      the investment management function;

    but for the 30-day rule, unless the individual is advising private customers on packaged products or is a broker fund adviser.

  4. (4)

    In (3), the '30-day rule' means the provisions of:

    1. (a)

      SUP 10.10.7 R (3); or

    2. (b)

      SUP 10.10.13 R (2); or

    3. (c)

      SUP 10.10.20 R (2);

    as appropriate.1

TC 2.5.5AR

3If a long-term care insurance contract provides that:

  1. (1)

    long-term care benefits are available after commencement of the policy at the option of the policyholder; and

  2. (2)

    as a result of the exercise of that option a new contract of insurance is offered to the policyholder;

an employee engaged in the activities referred to at TC 2.1.4 G 1(ha) need not, in respect of the contract containing the option, be required to pass an appropriate examination for long-term insurance contracts.

TC 2.5.5BG

3TC 2.5.5A R applies to the situation where a contract contains an option for the policyholder to take out a second, separate contract and that second contract provides for long term care benefits. Both contracts will be long-term care insurance contracts and subject to the rules applying to such contracts. However, TC 2.5.5A R provides that, where the two contracts are separate, an employee engaged in advising on the first contract (containing the option) need not be required to pass an appropriate exam for long-term care insurance. An employee advising on the second contract, which provides the long-term care benefits, must, however, have passed an appropriate exam for long-term care insurance.

TC 2.5.6G

A firm should, for the purposes of TC 2.8.1 R (Record keeping), make and retain records of the criteria governing its decision to apply3

  1. (1)

    3TC 2.5.5 R; or

  2. (2)

    3TC 2.5.5A R;

to an employee.3

TC 2.5.7G

2[deleted]

Appropriate examinations2

TC 2.5.8E
  1. (1)

    2This rule applies for the purposes of TC 2.4.2 R, TC 2.4.4 R, TC 2.4.5 R, TC 2.5.1 R, TC 2.5.3 R, TC 2.5.5 R and TC 2.7.5 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 as amended from time to time.

  3. (3)

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