FCA excludes adviser admin staff from new rules

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FCA excludes adviser admin staff from new rules

The Financial Conduct Authority plans to change its Senior Managers and Certification Regime to give advisers greater judgement on whether an administrative staff need certification.

In a consultation paper published today (January 23), the regulator claimed it had received a large amount of feedback asking for more clarity on whether the regime’s client dealing function applied to staff who interact with clients in purely administrative roles.

The client dealing function was broadened with the introduction of the regime, but the regulator has now advised that, under the rules as currently drafted, many low-risk individuals would be caught in the scope because they are taking part in "managing" or "arranging".

The FCA said: "In most cases, the activities undertaken by these individuals are unlikely to harm consumer or other users of financial services.

"These individuals will be following a procedure with appropriate systems and controls in place to prevent them from causing significant harm."

The regulator said the costs and administrative burden of requiring firms to certify such individuals would be disproportionate to the risks posed.

It therefore proposed to amend the rules to exclude an individual who has "no scope to choose, decide or reach a judgement" in a given situation and whose tasks do not require "significant skill".

The FCA said this amendment will allow firms to exercise judgment on whether a role requires certification.

The regulator suggested firms should consider whether a role is simple or largely automated or involves exercising discretion or judgement when assessing individuals on this basis.  

The consultation specified this proposal applied to all firms under the regime, including solo-regulated firms in their preparations for the certification regime.

The consultation closes on April 23, 2019.

rachel.addison@ft.com