Related provisions for TC 2.1.2
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 and experience17 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 attain 16an appropriate qualification 16as well except where the employee is giving personal recommendations25 on retail investment products or advising on P2P agreements, 24 see TC 2.1.5 R.16161717
In the FCA's view:
the table in (2) provides a non-exhaustive list of examples of key positions that should, subject to (d), be within a firm's definition of staff who are risk takers;
firms should consider how the examples in the table in (2) apply to their own organisational structure;1
firms may find it useful to set their own metrics to identify their risk takers based, for example, on trading limits; and
a firm should treat a person as being BIPRU Remuneration Code staff in relation to remuneration in respect of a given performance year if they were BIPRU Remuneration Code staff for any part of that year.
[Note: The FCA has published guidance on the application of particular rules on remuneration structures in relation to individuals who are BIPRU Remuneration Code staff for only part of a given performance year. This guidance is available at www.fca.org.uk/firms/remuneration
Suggested business lines
Heads of significant business lines (including regional heads) and any individuals or groups within their control who have a material impact on the firm's risk profile
Investment banking (including mergers and acquisitions advisory)
Heads of support and control functions and other individuals within their control who have a material impact on the firm's risk profile
Table: Examples of factors to take into account when deciding whether old misconduct is sufficiently serious to disclose
Factors to take into account
(A) Whether P has committed a serious breach of individual conduct requirements.
Factors to take into account in deciding whether the breach is serious include the following.
(1) The extent to which the conduct was deliberate or reckless.
(2) The extent to which the conduct was dishonest.
(3) Whether the breaches are frequent or whether they have continued over a long period of time. The fact that breaches were frequent or repeated may increase the likelihood that they should be disclosed since the breaches may show a pattern of non-compliance.
(4) The extent of loss, or risk of loss, caused to existing, past or potential investors, depositors, policyholders or other counterparties or customers.
(5) The reasons for the breach. For example, where the breach was caused by lack of experience which has been remedied by training or further experience, it is less likely that the breach will still be relevant.
(B) Whether the conduct caused B to breach requirements of the regulatory system or P was concerned in a contravention of such a requirement by B and, in each case, whether P’s conduct was itself serious.
(1) The factors in (A) are relevant to whether P’s conduct was serious.
(2) The seriousness of the breach by B is relevant. The factors in (A) are also relevant to this.
(3) A breach by B of certain requirements is always likely to be serious under (2). Breach of the threshold conditions is an example. However that does not mean that P’s involvement will automatically be serious.
(C) Whether P’s conduct involved dishonesty (whether or not also involving a criminal act).
Dishonesty is an important factor but it is not automatically decisive in every case. For instance, a small one-off case of dishonesty many years ago may not be sufficiently serious to require disclosure.
(D) Whether the conduct would have resulted in B’s dismissing P, had P still been working for B, based on B's disciplinary policies and the requirements of the law about unfair dismissal.
(E) Whether the conduct was such that, if B was considering P for a role today and became aware of the historical conduct, B would not employ P today notwithstanding the time that has passed.
Note 1: P refers to the employee about whom the reference is being written.
Note 2: B refers to the firm giving the reference.