TC 4.1 Specified requirements for MiFID investment firms and for third country investment firms

TC 4.1.1 R RP

1For a firm in relation to its MiFID or equivalent third country business the rules set out in column 1 of the table in TC 4.1.4R below are amended as set out in column 2.

TC 4.1.2 R RP

In this section, references to relevant individuals are natural persons who, on behalf of the firm:

  1. (1)

    make personal recommendations to retail clients in relation to financial instruments; or

  2. (2)

    provide information to retail clients about financial instruments, investment services or ancillary services; or

who are otherwise responsible for the supervision of a relevant individual who has not acquired the necessary knowledge and competence to act in a capacity prescribed in (1) or (2).

TC 4.1.3 R RP

References in TC 4.1.4R to a relevant individual’s knowledge and competence are to the knowledge and competence necessary to ensure that the firm, on behalf of which the relevant individual acts, is able to meet its obligations under:

  1. (1)

    those rules which implement articles 24 and 25 of MiFID (including those rules which implement related provisions under the MiFID Delegated Directive); and

  2. (2)

    related provisions of the MiFID Org Regulation.

TC 4.1.4 R RP

Unless the context requires otherwise the rules in column 1 of the table are amended as set out in column 2:

Column 1

Column 2

Relevant rule

Amendments

TC 2.1.1R(1)

Insert the following at the end of TC 2.1.1R(1):

“In addition, a firm must not assess a relevant individual as competent unless the firm has satisfied itself that the relevant individual possesses the knowledge and competence to enable the firm to meet its obligations under SYSC 5.1.5ABR. This means that the relevant individual has also:

(a) obtained appropriate experience which means that the relevant individual has successfully demonstrated the ability to carry on the activities through previous work experience. This work must have been performed, on a full-time equivalent basis, for a minimum period of 6 months; and

(b) attained an appropriate qualification which means a qualification or other test or training course that meets the criteria set out by the ESMA guidelines.

The level of knowledge and competence needed to fulfil the firm’s obligations reflects the scope and degree of the activities, as described in TC 4.1.2R above, carried out by the relevant individual.”

TC 2.1.2R

The provision is amended by adding after TC 2.1.2R:

“A relevant individual, who has not acquired the necessary knowledge or competence to carry out the activities in TC 4.1.2R above, cannot provide those activities under supervision for a period exceeding 48 months.”

TC 2.1.5R(1)

The provision is amended by adding after TC 2.1.5R:

“Where a relevant individual has not acquired the necessary knowledge and competence to carry out the activities described in TC 4.1.2R above:

(a) the firm must ensure that the individual supervising the relevant individual:

(i) has been assessed as competent to provide such personal recommendation or information;

(ii) has the necessary skills and resources to act as a competent supervisor; and

(iii) takes responsibility for the personal recommendation or information, referred to in TC 4.1.2R above, provided by the relevant individual under supervision as if the supervisor is providing the personal recommendation including any suitability report (COBS 9) or information; and

(b) the firm must ensure that the supervision provided to a relevant individual is tailored to the services provided by the individual.”

TC 4.1.5 G

2 Rules in this section relate to the requirements in SYSC 5.1.5ABR.

TC 4.1.6 G

2For relevant individuals of an incoming EEA firm, with an establishment maintained by that firm (or its appointed representative) in the United Kingdom, the matters covered by SYSC 5.1.5ABR are matters reserved for the United Kingdom as the Host State regulator.