The proposals concerning competency requirements under the new Fit and Proper regulations, published in December 2015, include the following:
Experience
It is proposed that, in order for a person to be approved as a key individual of a Category I FSP, he or she must have obtained experience in the management and/or oversight of the rendering of financial services. Currently those key individuals are only required to have experience in the management or oversight of a business irrespective whether or not such business relates to the rendering of financial services.
The Registrar is of the view that a key individual with no experience of the financial services industry would not be able to appropriately and effectively fulfil his or her duties under the Act and that the proposed amendment is necessary to ensure that the key individual is competent to perform his or her functions.
The proposed amendments further clarify the current position that a person’s experience lapses when such person has not rendered a particular financial service for a period of five years.
Qualifications
It is proposed that the Registrar, until finalisation of the review of the enhanced competency framework, continues to recognise qualifications for appropriateness based on the proposed new criteria instead of the current qualifying criteria that forms the bases of the second level of regulatory examinations.
The Registrar previously communicated to the industry that it does not intend to proceed with the implementation of the second level of regulatory examinations (product examinations) for the reasons provided. That, however, does not mean that a FSP will not be required to have sufficient knowledge of the product in respect of which he or she renders financial services. The objective of the review of the competency framework is to build on the existing requirements by investigating how better to ensure that FSPs have the right level of product related knowledge and, what product suppliers’ duties should be in achieving the desired objective where such FSPs are advising clients on their respective products.
