PS17/11: Review of appropriate qualification exam …

1 Policy StatementP S17/11*9 May 2017 Review of the FCA's appropriate qualification exam standards 2P S17/11 Financial Conduct AuthorityReview of the FCA's appropriate qualification exam standardsConsultation Paper 16/24* which is available on our website at or queries can be sent to:Steven McWhirter or Alex KoukoudisStrategy and CompetitionFinancial Conduct Authority25 The North ColonnadeCanary WharfLondon E14 5 HSTelephone: 020 7066 4562 Email: relates toContents1 Overview 32 Feedback on responses to CP16/24 6 Annex 1 List of non-confidential respondents 12 Annex 2 Industry working group participants 13 Annex 3 Abbreviations used in this paper 18 Appendix 1 Made rules (legal instrument)

2 Appendix 2 Final appropriate examination standardsreturns you to the contents listtakes you to helpful abbreviationsHow to navigate this document onscreen3 P S17/11 Chapter 1 Financial Conduct AuthorityReview of the FCA's appropriate qualification exam standards1 This policy statement provides feedback on responses to CP16/241 Review of the FCA s appropriate qualification exam standards . It also sets out the final, updated appropriate exam standards (AES) for appropriate qualifications listed in the Financial Conduct Authority s (FCA) Training and Competence (TC) In addition, we set out guidance in TC Appendix clarifying how to read and use the appropriate qualification tables (see Appendix 2).

3 Finally, we provide our feedback on responses to our question on whether to develop an additional equity release does this affect? This policy statement will be of particular interest to those organisations, such as the Accredited Bodies3, providing appropriate qualifications to the UK financial services industry. This policy statement may also be of interest to: firms and their employees who are required to have appropriate qualifications listed in our TC sourcebook prospective firms, employees or students who may be required to have appropriate qualificationsIs this of interest to consumers?

4 Consumers will deal with people in financial services firms who need to hold one or more of the qualifications listed in our Handbook. This policy statement should help consumers understand how the appropriate qualifications system CP16/24 Review of the FCA s appropriate qualification exam standards 2 TC sourcebook 3 4P S17/11 Chapter 1 Financial Conduct AuthorityReview of the FCA's appropriate qualification exam The FCA training and competence regime helps to protect consumers by making sure that staff working in financial services are appropriately qualified and well regulated.

5 It includes: a high-level competent employees rule that applies to people carrying on activities we regulate in all UK-authorised firms more-detailed requirements in addition to this for certain retail activities, including the need to achieve an appropriate qualification Under our TC regime, qualifications play an important role in providing an objective and independently verified benchmark of the entry level knowledge required to undertake specific activities, for example providing financial In September 2016 we published CP16/24, setting out proposals for revising the AES to reflect relevant developments since they were last reviewed.

6 Additionally, we proposed new guidance in TC Appendix to help people read and use the appropriate qualification We also used the consultation to explore stakeholder views on the potential for an additional equity release qualification to help consumers access this The purpose of this policy statement is to provide our feedback on the responses we received and to finalise our changes. Summary of feedback and our response1 .11 The majority of the respondents agreed with our proposed updates to the AES. We set up a series of meetings with interested parties as part of our Review this was reflected in the feedback we received, with many respondents saying that they felt the Review had been conducted in a thorough and systematic We consulted on reducing the number of regulation and ethics AES from three to two.

7 Respondents welcomed our proposal on Regulation & Ethics unanimously. They believed that this will help avoid duplication in standards and make them more relevant to both individuals and firms. Additionally, there was a consensus among respondents that our proposal allows for standards to be applied based on the individual s attainment level of either level three or four All respondents welcomed the introduction of Handbook guidance and believed that this is helpful in navigating the qualification tables in TC Appendix However, there was a consensus that more should be done to improve the format and presentation of the tables to make them more interactive, user friendly and easier to understand.

8 We received mixed feedback on whether there was a market need for a standalone or top-up equity release qualification . Most respondents didn t think that an alternative to the current approach would lead to a significant increase in the number of people appropriately qualified. Therefore, we have decided not to change the appropriate qualification for equity release at this time. 5 P S17/11 Chapter 1 Financial Conduct AuthorityReview of the FCA's appropriate qualification exam standardsCost benefit analysis and compatibility statement The cost benefit analysis remains as published in CP16/24.

9 In addition to the compatibility statement published in CP16/24, we have also had regard to the recommendations made by the Treasury under FSMA about aspects of the economic policy of Her Majesty's Government in connection with our general duties, in their recommendation letter dated 8 March 2017. Having had regard to the recommendations, we will proceed to make changes as proposed. Equality and diversity We are required under the Equality Act 2010 to have due regard to the need to eliminate discrimination and to promote equality of opportunity in carrying out our policies, services and functions.

10 As part of this, we conducted an equality impact assessment to ensure that the equality and diversity implications of our new policy proposals are considered. We published our equality impact assessment in CP16/24 and invited feedback on the potential impact of our proposals on equality and diversity issues. Our initial assessment was that our proposals will not create any equality and diversity issues and we did not receive any comments to indicate otherwise. 6P S17/11 Chapter 2 Financial Conduct AuthorityReview of the FCA's appropriate qualification exam standards2 Feedback on responses to CP16 This chapter sets out feedback on the responses received to our proposals in CP16 examination The majority of the respondents agreed with our proposed updates to the AES.