1. (1)

   13A firm must not assess an employee as competent to carry on an activity in TC Appendix 1 until the employee has demonstrated the necessary competence to do so and has (if required by TC Appendix 1) attained 16each module of an appropriate qualification16. This assessment need not take place before the employee starts to carry on the activity.14

   161613
2. (2)

   A firm may assess an employee who is subject to, but has not satisfied, an appropriate qualification16requirement as competent to the extent that:14

   16
   1. (a)

      that employee works in a branch in an EEA State other than the United Kingdom;14

   2. (b)

      the employee is engaging in MiFID business; and14

   3. (c)

      there is no appropriate qualification 16or equivalent in that EEA State.14

      16

A firm must not allow an employee to carry on an activity in TC Appendix 1 without appropriate supervision.

Where an

employee is giving advice on retail investment products17 to retail clients and has not been assessed as competent to do so, the firm must ensure that the individual supervising and assessing that employee has attained 16an appropriate qualification.16

A firm must ensure that an employee does not carry on an activity in TC Appendix 1 (other than an overseeing activity) for which there is a qualification 16requirement without first attaining16 the relevant regulatory module

of an appropriate qualification16.

A firm must ensure that an employee does not carry on any of the following activities without first attaining 16each module of an appropriate qualification:16

1. (1)

   [deleted]16

   16
2. (1A)

   16advising on and dealing in securities which are not stakeholder pension schemes, personal pension schemes18 or broker funds;

3. (1B)

   advising on and dealing in derivatives;

4. (2)

   the activity of a broker fund adviser;

5. (3)

   advising on syndicate participation at Lloyd's; or

6. (4)

   the activity of a pension transfer specialist.

17A firm must ensure that an employee who was assessed as competent as a retail investment adviser for the purposes of TC 2.1.1 R at 30 June 2009 does not carry on the activity of a retail investment adviser without first attaining an appropriate qualification.

1. (1)

   If a firm is satisfied that an employee meets the conditions in this rule then the requirements to have attained 16each module of an appropriate qualification 16will only apply if that employee is carrying on one of the activities specified in this rule.

   1616
2. (2)

   The conditions are that a firm should be 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)

      has not previously been required to comply fully with the relevant qualification 16requirements in TC 2.1.1 R; and

      16
   3. (c)

      has passed the relevant regulatory module of an appropriate qualification16;

      16

   but (b) and (c) do not apply to an employee who is benefiting from the "30-day rule" exemption in SUP 10A.10.8 R or the "14-day rule" exemption in SYSC 5.2.28AR22, unless the employee benefits from that rule because he is advising retail clients on retail investment products17 or is a broker fund adviser.

   353517
3. (3)

   The relevant activities are:

   1. (a)

      advising on investments which are retail investment products ,17 if that advice is given to retail clients;

      17
   2. (b)

      the activity of a broker fund adviser;

   3. (c)

      advising on syndicate participation at Lloyd's; or

   4. (d)

      the activity of a pension transfer specialist.

A firm must review on a regular and frequent basis employees' competence and take appropriate action to ensure that they remain competent for their role.

Subject to TC 2.1.17 R, a firm must ensure that a retail investment adviser who has been assessed as competent for the purposes of TC 2.1.1 R remains competent by completing a minimum of 35 hours of appropriate continuing professional development in each 12 month period.17

A firm is permitted to suspend the requirements of TC 2.1.15 R in respect of a retail investment adviser for the period of time during which the retail investment adviser is continuously absent from work, if that absence is due to:

1. (1)

   maternity, paternity or adoption leave;

2. (2)

   long-term illness or disability;

3. (3)

   caring responsibilities for a family member who has a long-term illness or disability; or

4. (4)

   any other absence allowed in order for the firm to meet its statutory duties in relation to equality and diversity.17

A firm must, for the purposes of TC 3.1.1 R (Record keeping), make and retain records of:

1. (1)

   the continuing professional development completed by eachretail investment adviser;

   and

2. (2)

   the dates of and reasons for any suspension of the continuing professional development requirements under TC 2.1.17 R.17

A firm must not prevent a retail investment adviser from obtaining a copy of the records relating to that retail investment adviser which are maintained by the firm for the purposes of TC 2.1.24 R.17

A firm must ensure that a retail investment adviser confirms annually in writing that the retail investment adviser has, in the preceding 12 months:

1. (1)

   complied with APER or COCON (as applicable)20; and

2. (2)

   if applicable, completed the continuing professional development required under TC 2.1.15 R. 17

A firm must obtain from an accredited body independent verification of the firm's compliance with:

1. (1)

   in respect of its retail investment advisers only, the requirement in TC 2.1.1 R to attain each module of an appropriate qualification;

2. (2)

   TC 2.1.15 R; and

3. (3)

   TC 2.1.26 R.17

The independent verification in TC 2.1.27 R must be obtained by a firm:

1. (1)

   in respect of a competent retail investment adviser who began to carry on the activity of a retail investment adviser on or before 31 December 2012, within 60 days of that date and of the anniversary of that date thereafter;

2. (2)

   in respect of a retail investment adviser who began to carry on the activity of a retail investment adviser on or after 1 January 2013, within 60 days of the date on which the retail investment adviser was assessed as competent as a retail investment adviser and of the anniversary of that date thereafter.17

17A firm must notify the FCA as soon as reasonably practicable after it becomes aware, or has information which reasonably suggests, that any of the following events has occurred or may have occurred in relation to any of its retail investment advisers, and the event is significant:

1. (1)

   a retail investment adviser, who has been assessed as competent for the purposes of TC 2.1.1 R, is no longer considered competent for those purposes;

2. (2)

   a retail investment adviser has failed to attain an appropriate qualification within the time limit prescribed by TC 2.2A.1R (1);

3. (3)

   a retail investment adviser has failed to comply with a Statement of Principle in carrying out their20controlled function or has failed to comply with COCON (as applicable)20; and

4. (4)

   a retail investment adviser has performed an activity in TC Appendix 1 before having demonstrated the necessary competence for the purposes of TC 2.1.1 R and without appropriate supervision.

1. (1)

   1For the purposes of TC 2.1.1 R, if an employee carries on an activity in TC Appendix 1 (other than an overseeing activity), a firm must ensure that the employee attains an appropriate qualification within 30 months of starting to carry on that activity.

2. (2)

   For the purposes of (1), a firm must record the date on which the employee starts to carry on that activity.

For the purposes of calculating the 30 months referred to in TC 2.2A.1 R, a firm must:

1. (1)

   aggregate periods of time spent carrying on the activity during different periods of employment; and

2. (2)

   disregard any period of 60 business days or more during which the employee is not carrying on the activity due to being continuously absent from work.

A firm must ensure that any employee who does not attain an appropriate qualification within the specified time:

1. (1)

   ceases to engage in the activity to which that qualification would relate; and

2. (2)

   does not resume that activity without first attaining an appropriate qualification.

A firm should, for the purposes of TC 3.1.1 R (Record keeping), make and retain records of the time limits within which the appropriate qualification has been attained.

1This section applies to a firm with employees that are retail investment advisers.

1. (1)

   A firm must submit a report (the ‘data report’) to the FCA containing the information required by TC 2.2B.4 R quarterly, within 20 business days of the end of the quarter, unless (3) applies.

2. (2)

   The reporting periods are the four calendar quarters of each year beginning on 1 January.

3. (3)

   A firm need not submit a data report if no changes have occurred in relation to the information submitted by the firm in its previous report.

4. (4)

   A firm may submit a data report more frequently than quarterly if it wishes.

The report must contain professional standards data as follows:

1. (1)

   the firm's name and Firm Reference Number;

2. (2)

   the names3 of the firm's employees who are retail investment advisers, including trainees;

   2
3. (2A)

   the following information in respect of the employees in (2):3

   1. (a)

      the employee’s Individual Reference Number (IRN); or3

   2. (b)

      in the case of an employee of a relevant authorised person who is performing an FCA-specified significant harm function and has no IRN:3

      1. (i)

         the employee’s National Insurance (NI) number and date of birth; or3

      2. (ii)

         if the employee has no NI number, the employee’s date of birth, current passport number and nationality;3

4. (3)

   whether a retail investment adviser has attained an appropriate qualification;

5. (4)

   if a retail investment adviser has not attained an appropriate qualification, the date on which the employee began to carry on the activity of a retail investment adviser;3

6. (5)

   the name of the accredited body used for the purposes of TC 2.1.27 R; and3

7. (6)

   whether the firm has assessed a retail investment adviser as competent for the purposes of TC 2.1.1R.3

The data report must comply with the provisions of TC Appendix 8R.

A firm must submit the data report to the FCA electronically in a standard format prescribed by the FCA.

A data report will not have been submitted to the FCA in accordance with TC 2.2B.6 R unless all mandatory data reporting fields (as set out in TC Appendix 8R) have been completed correctly and the report has been accepted by the relevant FCA reporting system.