May updates from the FCA on CPD and cover for Senior Managers

The FCA has published additional flexibility this month in response to the coronavirus pandemic in the following two areas

01 June 2020

FCA allows individuals to carry over uncompleted CPD hours to next CPD year in exceptional circumstances

During the current pandemic, the FCA expects firms to continue to demonstrate that relevant individuals remain competent, but are also allowing firms to defer individuals’ CPD to the next CPD year.

The FCA have stressed that during the current pandemic they expect firms to continue to demonstrate that relevant individuals remain competent to carry out their work and that effective and consistent CPD remain essential. They recognise, however, that there may be ‘exceptional circumstances’ which make it difficult for individuals to complete CPD for the year, and in such case firms may defer individuals’ uncompleted CPD to the next CPD year.

This will be of most relevance to:

  • financial advisory firms - who must ensure their retail investment advisers complete the required minimum 35 hours of CPD and get independent verification from an accredited body that the firm has met this requirement
  • insurance intermediaries - who must ensure that each relevant employee completes a minimum of 15 hours of professional training or development in each 12-month period.

Circumstances that will be regarded as ‘exceptional’ are:

  • when individuals during the current pandemic:
    • are needed to carry out extra duties to manage risks, and/or to provide support, to consumers and businesses during the current situation
    • have caring responsibilities, such as having to care for a partner, child, parent, grandparent or sibling
    • have difficulties accessing CPD material, for example, due to technical difficulties or unavailable material

and

  • where it is not realistic to expect the individual also to fulfil the CPD requirements.

FCA publish a modification by consent extending the maximum period firms can arrange cover for absent Senior Managers as a result of COVID-19 pandemic

The FCA have published a modification by consent which is available to solo regulated firms who need to make or extend temporary arrangements to cover absences as a result of the coronavirus pandemic. The modification aims to provide flexibility to firms at this time and also to reduce the administrative burden to firms, by removing the need for firms to submit Form A applications or Form Js and Statements of Responsibilities notifications, if the changes are temporary and directly related to the pandemic.

The modification allows an individual to cover a Senior Manager without being approved for up to 36 weeks in a consecutive 12 month period (increased from the usual maximum of 12 weeks), and to allow firms to allocate an absent Senior Manager’s Prescribed Responsibilities to an individual covering the role. This will assist firms where a Senior Manager is absent because of COVID-19 or where recruitment to replace a Senior Manager has been affected by the pandemic. Firms wanting to utilise the modification by consent must make an application via the FCA’s Connect system.

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