Make sure your FSP is Fit and Proper

FSPs need to set out adequate policies and internal processes to ensure that the Key Individuals and Representatives fulfil their duties in an honest manner and comply with the requirements. In addition, FSPs must be able to meet standards or principles of good standing like keeping up-to-date with regulatory obligations, having a valid licence, having no outstanding reports, not owing any fees and ensuring that all requirements are met.

Competence is defined in Board Notice 194 as, “Having the skills, knowledge and expertise needed for the proper discharge of a person’s responsibilities in the performance of his or her functions.” The FSP and Key Individual must therefore make sure that Representatives receive adequate training in order to maintain compliance and be competent enough to offer clients the particular financial services or products for which they are authorised.

The Competence requirements include Regulatory Exams, Class of Business training, Qualifications, Product Specific Training and Experience. Continuous Professional Development (CPD) must be undertaken to ensure that the level of competence is maintained, updated and, where necessary, new knowledge and skills are developed. FSPs must also establish, maintain, update and submit a competence register to the FSCA if requested to do so.

Did you know? Masthead can help you achieve your competence requirements

The Masthead Learning Centre provides individuals with an opportunity to manage their compliance, grow, improve their knowledge and learn new skills all in one place. By registering on the Learning Centre, you will have access to CPD activities,  RE 1 and RE 5 Preparation and RE Mock Exams, Class of Business training and more.

Masthead has its very own competence register which makes it easy for you to:

• Record and keep track of all your training activities.
• Keep all records relating to COB, PST, CPD, RE and Qualifications in this register.
• Easily keep record of all training done through the Masthead Learning Centre as these are pulled through automatically.
• Add external training quickly and easily.
• Add supporting documents such as certificates and degrees.
• Export all records for reporting purposes in seconds.
• Manage your CPD hours easily – just export and filter on the dates.

Note: All information and documents relating to training will be retained in accordance with Board Notice 194 requirements.

Operational ability refers to the functional skill, capability and capacity of a person or organisation to perform certain duties, tasks and obligations.

Key Individuals and Representatives have certain operational ability requirements that they need to comply with so that they efficiently carry out their duties relevant to their role in the FSP. In addition, FSPs have a set of requirements that help them monitor their compliance and ensure that they deliver continuous and satisfactory service to clients. This includes adequate communication facilities, storage and filing systems for safekeeping of records and more.

Attend this webinar or face-to-face seminar 

How to create an effective Operations Manual for your FSP – Get a thorough understanding of the policies and processes that must be included in your FSP’s Operations Manual. By attending, you will have a good grasp of the regulatory requirements applicable to the Operations Manual.

FSPs are required to implement an effective Governance Framework which must include the following: Conduct Risk Management; Business Plan; Risk Management Policies, Processes and Systems; Accounting Policies and Processes; Remuneration Policy for all staff; Business Continuity Policy; Financial Recovery Plan; Regular monitoring of systems, processes and internal controls. This Governance Framework must support practical management and oversight of the financial services that the FSP provides and must ensure the fair treatment of clients by integrating the TCF principles into the policies.

Attend these webinars or face-to-face seminars

How to create a Business Plan that works –Walk away with a road map that you and your team can follow to ensure the success and growth of your business.

Develop a Risk Management Plan to protect your business, employees and clients – Gain a thorough understanding of what the Conduct Authority requires of you and how to implement it.

Automated Advice is a new requirement under Operational Ability. FSPs that provide automated advice (e.g. robo-advice that uses algorithms and technology, without the direct involvement of a natural person) must monitor and review the automated advice generated by algorithms and ensure the quality and suitability of the automated advice for their clients.

This is a new requirement introduced for FSPs that outsource some of their functions to other parties. Where an FSP outsources certain functions (e.g. functions that the law requires it to perform or important operational functions) the FSP must ensure that the person to whom the function is being outsourced is capable and authorised (if needed) and the FSP must have measures to assess the standard of performance of the outsourced delivery.

They should have a written agreement in place which governs the outsource arrangement and addresses the rights, responsibilities, service-level requirements and access by the FSP and Conduct Authority to the business and the information.

Another requirement under Operational Ability is the Appointment of Representatives. An FSP must ensure that when appointing a Representative, that person must possess the operational ability to effectively function as a Representative of the FSP or perform the activities for which that person was appointed. The FSP must therefore develop and implement a process that includes the necessary Human Resources policies and processes which should include a Recruitment and Selection policy.

FSPs must maintain financial resources that are adequate to carry out their activities and ensure that they can meet their liabilities as these fall due. FSPs must therefore set out how it will ensure it has adequate financial resources and how it will manage and monitor compliance with the Financial Soundness requirements applicable to their type of FSP.

 Attend this webinar or face-to-face seminar 

Learn how to build a robust Financial Management Model – Get guidelines and tools to empower you to implement or improve your current financial management models.