6.4 High-Level Standards and the Training and Competence (T&C) Regime

6.4 High-Level Standards and Training and Competence

The FCA Handbook's High-Level Standards include PRIN, SYSC, APER, FIT, TC and COCON. They set different firm-governance and individual-conduct duties; each sourcebook has its own application rules. A firm should check which activities, people and products a provision covers before treating it as a universal requirement.

PRIN and SYSC

PRIN 2.1 lists the 12 Principles for Businesses. Principle 12 requires a firm to act to deliver good outcomes for retail customers, with detailed Consumer Duty requirements in PRIN 2A. Under PRIN 3.2.10R, Principles 6 (customers' interests) and 7 (communications) do not apply to activities to the extent the Consumer Duty applies. They remain relevant outside that scope, such as some services to professional clients. Other Principles also have application limits in PRIN 3. A breach of an applicable Principle can be enforced even where no detailed rule captures the same conduct.

SYSC covers governance, competent employees, compliance, risk management and other systems and controls. Specific duties vary by firm type and activity. For example, firms must allocate responsibilities clearly and maintain controls appropriate to their business; they remain responsible for regulated work performed through an outsourcing arrangement. SYSC supports, but is distinct from, the Senior Managers and Certification Regime (SMCR).

APER, FIT and COCON

APER contains Statements of Principle and a Code of Practice for approved persons to whom that regime applies. The modern SMCR covers most authorised firms; APER remains relevant to specified approved-person roles, including certain appointed-representative functions. It is not a parallel rulebook for every employee in every SMCR firm.

FIT provides criteria for fitness and propriety when assessing relevant approved persons and certification staff. The main dimensions are honesty, integrity and reputation; competence and capability; and financial soundness. Firms must assess the individual in the context of the actual function rather than treat the headings as a mechanical pass list.

COCON contains individual Conduct Rules for people within its scope in SMCR firms, including relevant senior managers, certification staff and other non-ancillary employees. Some ancillary roles are excluded. Individual accountability and a firm's governance duties are related, but the rules do not apply identically to all staff.

TC: qualifications, supervision and competence

TC 1.1.1R applies the Training and Competence sourcebook where a firm's employee carries on an activity in TC Appendix 1 for a retail client, customer or consumer, subject to the Appendix 3 limitations. TC does not impose the same qualification rule on every job. Under TC 2.1.1R, a firm must not assess an employee as competent for an Appendix 1 activity until the person has demonstrated the necessary competence and attained any qualification required for that activity. The assessment need not always precede starting the activity; TC 2.1.2R requires appropriate supervision while it is carried on.

The appropriate qualification is activity-specific and the FCA lists recognised qualifications in TC Appendix 4. CeMAP is one listed route for ordinary regulated mortgage advice; it is not the only recognised qualification. The full CII Certificate in Equity Release includes mortgage-advice unit CF6, a regulation-and-ethics unit (R01 or CF1) and ER1, and CII identifies it as a route for mortgage and equity-release advice. ER1 alone is not the complete qualification. Retail investment advice has its own qualification standard, generally at Level 4. Firms should check the completed modules and any transitional conditions applicable to the employee's activity.

A practical competence process is to identify the activity, check the qualification modules, supervise work at the appropriate intensity, assess demonstrated competence and keep monitoring after sign-off. Supervisors need suitable technical and assessment skills. A certificate alone does not prove continued competence.

Continuing professional development and records

For a retail investment adviser already assessed as competent, TC 2.1.15R requires at least 35 hours of appropriate CPD in each 12-month period, subject to specified suspension provisions. TC 2.1.16G recommends that at least 21 of those hours be structured. The 35 hours are total CPD, not 35 structured hours. Structured activity can include courses, workshops and relevant e-learning; research, reading and coaching can count as unstructured activity when appropriate. Learning objectives, outcomes and evidence should be recorded. Mortgage advisers must maintain competence under applicable rules, but this 35-hour retail-investment-adviser minimum must not be presented as a universal mortgage-adviser threshold.

TC 2.1.24R requires records of relevant CPD. Under TC 3.1.1R, competence records are retained after the employee stops the activity for at least five years for MiFID business, three years for non-MiFID business, and indefinitely for a pension transfer specialist. A blanket five-year retention rule is inaccurate.

Primary sources: PRIN 2.1, PRIN 3.2, TC 1.1, TC 2.1, TC 3.1, TC Appendix 4, CII Certificate in Equity Release, and COCON 1.