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TC 2.7 Supervising and monitoring2

Supervising employees not assessed as competent2

TC 2.7.1R

If a firm's employees engage in an activity with or for private customers, the firm must ensure that if an employee is not assessed as competent, but is permitted in accordance with TC 2.4.2 R to engage in a particular activity under supervision, the employee is appropriately supervised until assessed as competent in that activity.2

TC 2.7.2G
  1. (1)

    A firm should have arrangements in place to ensure that levels of supervision are appropriate in relation to an employee's ability to apply the necessary knowledge and skills.

  2. (2)

    A firm should ensure that an employee who is being supervised undergoes, as appropriate:

    1. (a)

      review and assessment of work;

    2. (b)

      individual coaching and assessment of performance, for example, role-play and accompanied private customer visits.

TC 2.7.3R


TC 2.7.4G


Supervisors of employees advising private customers on packaged products

TC 2.7.5R

If an employee who is not assessed as competent is engaging in the activity of giving advice on investments which are packaged products 2(other than basic advice) 3to private customers, the firm must ensure that the individual supervising that employee:

  1. (1)

    has passed an appropriate examination; and1

  2. (2)

    has the technical knowledge, assessment skills and coaching skills to act as supervisor, before acting as supervisor, and that this competence is maintained.

2Monitoring employees assessed as competent

TC 2.7.5AR

2A firm must have arrangements in place to ensure that an employee who is engaging in an activity with or for private customers and who has been assessed as competent is appropriately monitored.

TC 2.7.5BG

2What level of monitoring is appropriate will depend on all the circumstances including the knowledge and skills of the employee. It is likely to be less intense than the level of supervision carried out under TC 2.7.1 R. If the employee is, for example, a sole trader, or the only director or partner engaging in the activity, the firm should make whatever arrangements are appropriate in the circumstances, bearing in mind that it can become difficult to be objective about one's own performance.

TC 2.7.5CR

2If an employee who is engaging in an activity with or for private customers falls below the standard expected of a competent employee, the firm must make arrangements for supervising the employee, having regard to the provisions of TC 2.7.1 R and TC 2.7.5 R.

Supervising and monitoring: record keeping2

TC 2.7.6G

A firm should, for the purposes of TC 2.8.1 R (Record keeping), make and retain records of:

  1. (1)

    the criteria applied in deciding the level of supervision and monitoring required in respect of its employees; and2

  2. (2)

    how the supervision and monitoring of its employees is carried out.2