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TC 2.4 Attaining competence

TC 2.4.1R

A firm must not permit an employee to engage in or oversee an activity unless:

  1. (1)

    the employee has been assessed as competent in that activity in accordance with TC 2.4.5 R; or

  2. (2)

    the employee engages in or oversees the activity while under appropriate supervision; or

  3. (3)

    the employee has been assessed in accordance with TC 2.4.5 R as competent to engage in or oversee a particular activity, but then engages in or oversees in a different activity, then the employee is appropriately supervised until assessed as competent in that new activity.

TC 2.4.2R

A firm which permits an employee to engage in an activity with or for a private customer under supervision must ensure that:

  1. (1)

    the employee has first passed the relevant regulatory module of an appropriate examination; and2

  2. (2)

    the firm has satisfied itself that the employee has an adequate level of knowledge and skills to act with or for private customers while under supervision2.

TC 2.4.3G

In TC 2.4.2 R (2)an adequate level of application of knowledge and skills includes:

  1. (1)

    specific knowledge of the firm's relevant systems and procedures, and of the kinds of designated investment business14 andregulated mortgage activities carried on by the firm; and

  2. (2)

    appropriate skills in analysing private customers' needs and circumstances when applying relevant knowledge.

TC 2.4.4R

If a firm permits an employee under supervision to engage in:

  1. (1)

    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; or2

  2. (2)

    the activity of a broker fund adviser; or

  3. (3)

    advising on syndicate participation at Lloyd's; or

  4. (4)

    the activity of a pension transfer specialist;

the firm must ensure that the employee has first passed an appropriate examination before permitting the employee to engage in the relevant activity.2

Assessing competence

TC 2.4.5R

A firm must not assess an employee as competent to engage in or oversee an activity unless the employee:

  1. (1)

    has been assessed as competent to apply the knowledge and skills necessary to engage in or oversee the activity without supervision; and

  2. (2)

    has passed each module of an appropriate examination2.

TC 2.4.6G

A firm should ensure that its assessments take into account:

  1. (1)

    technical knowledge and its application;

  2. (2)

    skills and their application; and

  3. (3)

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

TC 2.4.7G

A firm should use methods of assessment that are appropriate to the activity and to the employee's role.

TC 2.4.8G

A firm should ensure that its employees are aware how its training and competence arrangements apply to their individual roles.

TC 2.4.9G

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 assessing competence; and

  2. (2)

    how and when the competence decision was arrived at.