FCA Finalises Rules on Financial Directory

By The Enforcd Team

At the beginning of March the FCA published rules on a new directory of financial services personnel in a bid which is intended to boost transparency for the sector. Here’s what it will mean for you and your business.

The FCA has been taking consultation on the final rules over the course of the last year and have now defined who will have to be listed. It will contain the following:

  • SMCR certified individuals.
  • Executive and non-executive directors who are not senior managers.
  • Other individuals such as sole traders or appointed representatives if they undertake business with clients and require a qualification to do so.

It will list key information including the details of the employer, relevant roles held, any restrictions on the businesses trading activities, membership of accredited membership bodies and any regulatory sanctions or prohibitions.

The idea is that the public can go online and check the identify of anyone in the financial services that they engage with. As such it is designed to give people more reassurance that the people they are engaging with are legitimate. Among the features likely to be included is a health warning in which the FCA will let consumers know that there’s a high chance the information will be out of date.

If a firm submits data which is inaccurate or incomplete you could be in for a £250 fine and further sanctions could be levied when breaches are repeated or more serious. Senior managers will face penalties for repeated breaches and firms will be required to demonstrate that they have taken all reasonable measures to ensure compliance.

Many of the implications are practical. Firms will have to be prepared to have much more of their data publicly viewable and they will have to do this extremely quickly. Firms will have to provide accurate information to the FCA about their directory persons within a single day of making a change. You will need to embed effective capture and notification processes to ensure all staff changes are reported within the FCA’s time frame.

This will put a lot of pressure on administrative teams, especially those firms which have a large number of certified personnel. The chances are it will be difficult to capture all this information manually so an automated system will be needed.

You will also need to factor in the requirements of the directory into any ongoing plans you’re making for the arrival of SMCR.

As things stand, you can start submitting data in September following on from the commencement of the senior managers regime for solo regulated firms. The directory will go live this time next year. The FCA’s existing register has already proved to be extremely popular, and this plugs a glaring gap left by SMCR. However, it will add another layer of practical challenges for those firms looking to ensure they comply.