Professional Qualifications (Investment Business)

Summary

This is a JFSC guidance note that supplements the Code of Practice for Investment Business (the IB Code). It sets out which professional qualifications the Commission regards as acceptable evidence that an investment employee is competent to perform particular regulated functions, such as managing investments, dealing, or advising professional or retail clients.

The IB Code already requires registered persons to assess and monitor employee competence, and requires investment employees to hold a qualification appropriate to their role. Since 1 January 2014, any investment employee giving investment advice to Retail Clients must hold a qualification at Qualifications and Credit Framework level 4 or above, or level 3 with gap-fill, as described in the IB Code.

• Qualification table: Section 2 lists acceptable qualifications by awarding body (e.g. CISI, CII, CFA UK, IFS, FINRA, ACI, CAIA) and maps each to the specific functions (managing, dealing, advising professional clients, advising retail clients) it supports, noting where gap-fill or additional modules are required.
• Employer responsibility: Registered persons remain responsible for ensuring each employee holds a qualification appropriate to the specific role performed; a qualification suitable for one activity or client type may not be suitable for another.
• Unlisted qualifications: Qualifications not listed, including overseas qualifications or those in the FCA's Appropriate Qualification Tables, may be accepted by the Commission as equivalent.
• Alternative qualification applications: Paragraph 3.3.9 of the IB Code sets out the process for applying to the Commission to have alternative qualifications considered.
• Complex products: Where complex transactions or investments (e.g. derivatives) are involved under paragraph 3.3.8 of the IB Code, firms may refer to the FCA's Appropriate Qualification Activities list to check compatibility.

The table is reviewed and updated periodically to reflect new or changed qualifications and industry feedback, so registered persons should check for the latest version when assessing staff competence.

Key obligations

• A registered person must assess and monitor the competence of its investment employees, including by reference to professional qualifications held.
• All investment employees must hold a professional qualification appropriate to their role.
• Since 1 January 2014, any investment employee providing investment advice to Retail Clients must hold a qualification at QCF level 4 or above, or level 3 with gap-fill.
• A registered person must ensure each employee's qualification is appropriate to the specific function performed (managing, dealing, advising professional clients, advising retail clients), not assume a qualification suitable for one activity suffices for another.
• Where an employee's qualification is not listed or is uncertain for a given activity, the registered person may need to apply to the Commission (under IB Code paragraph 3.3.9) for consideration of an alternative qualification.

Applies to

registered persons under the Code of Practice for Investment Business, investment businesses, investment employees

Deadlines

• 1 January 2014: From this date, investment employees advising Retail Clients must hold a qualification at QCF level 4 or above, or level 3 with gap-fill.