2016 deadline
Individuals subject to either the SMR or the Certification Regime will also be subject to the new Conduct Rules from the commencement of the new system on 7 March 2016, while firms will have another year to prepare for the wider application of the Conduct Rules to other staff.
The FCA and the Prudential Regulation Authority (PRA), which jointly published the new rules, said they had taken into account industry concerns that the new system could create a two-tiered regime for financial advisers. This would be between those that are subject to the new Certification Regime because they work for banks or other relevant firms and those who remain subject to the Approved Persons Regime which covers financial advisers.
“We have acknowledged the potential for regulatory inconsistency between advisers operating within the new regime and those who are employed by firms outside of its scope.”
“We do not believe that there is any conflict between the new Certification Regime and the rule put in place following the RDR.”
However the regulators said: “It is also important to recognise, though, that firms will in future have greater responsibility in relation to Retail Investment Advisers, who will no longer be subject to FCA preapproval.
“Firms will need to be fully equipped to identify their Retail Investment Advisers, ensure that they are fit and proper and qualified to the minimum standards introduced by the RDR, and that they have appropriate Statements of Professional Standing (SPSs).”
The new FCA and PRA rules follow the publication in June 2013 of a report by the Parliamentary Commission for Banking Standards, called “Changing Banking for Good”, which set out recommendations for legislative and other action to improve professional standards and culture in the UK banking industry.
This was followed by legislation in the Banking Reform Act 2013 to replace the Approved Persons Regime for banks, building societies, credit unions and PRA-designated investment firms with a new regulatory framework for individuals.
