New FCA Directory of regulated people

What is changing?

The Financial Services Register provides the public with a way of checking that firms and individuals have been reviewed and approved by the FCA.

Following the introduction of the Senior Managers & Certification Regime the register will continue but with fewer individuals listed on it. All customer functions (e.g. financial advisers) will no longer appear on the register. This is because only individuals who hold Senior Management roles will continue to be listed on the register – as members of the public will still need to be able to check if advisers are associated with a particular firm.

The FCA proposes that the public Directory will include information on a wider range of individuals than the FS Register including;

  • Certified staff.
  • All non-Senior Manager Function Directors such as Non-Executive Directors;
  • Individuals performing roles which require specific qualifications (e.g. mortgage advisers).
  • Sole traders.
  • Appointed representatives.

Whereas the existing register contains relatively limited information, the new Directory will contain a much broader sweep of information including:

  • Individual’s name and unique individual reference number (IRN);
  • The roles held by the individual;
  • Start and end dates of each role the individual has held;
  • The type of regulated business an individual is qualified to undertake;
  • Geographic location (not listed where a firm may believe that that disclosure of this information might put the individual at risk);
  • Ways to contact the individual, for example, face to face, telephone, email etc;
  • Any bodies which the individual may be accredited by e.g. the Chartered Insurance Institute;
  • Any regulatory sanctions which have been imposed on the individual; and
  • The date the information was last updated.

What else do you need to know?

Well, the bad news is that any existing data on the register will not be automatically grandfathered over to the new system. As such, firms will need to manually upload information about existing individuals again. Banking firms and insurers can start submitting data on Directory individuals using Connect, or the multi-entry facility, from around September 2019. All other firms can start submitting data following the commencement of the SM&CR for solo-regulated firms.

The onus is on the firm to ensure that all data remains up to date and is updated and reviewed at least on an annual basis. Firms must report any changes to the FCA within 7 business days, with an administrative fee of £250 for any missed reporting from late or inaccurate data, as such it is key that firms get this right!

For Solo Regulated Firms, they will be required to update this information via Connect. If you log in to Connect today, the facility is already there but greyed out until SM&CR goes live.

From 9th December the register will refer to CF30s as “regulatory approval no longer required” (a snappy title). This means that for the initial 12 months until the directory is fully functional the register will be out of date.

Our thoughts?

The introduction of the Directory is a step in the right direction, as it will increase the information available for firms and customers to help with deciding if they want to hire or enter into business with an adviser/firm.

The Directory will also provide a useful source of intelligence for fitness and propriety reviews as it will increase the information available at onboarding and ongoing reviews.

The £250 fee for any failure in reporting places a monetary incentive on firms to get it right. However, keeping the Directory up to date will add a burden on firms (particularly larger firms) to ensure that existing systems and controls are sufficient to track and retain correct, up to date information.

It is also worth bearing in mind that firms need to appoint a specific Senior Manager who will hold ultimate Senior Manager accountability for the information provided to the FCA.

When should I upload it?

Banks, Building Societies, Credit Unions and Insurers have already started uploading their information, we can expect to start seeing this information appearing on the directory in early 2020.

For solo-regulated firms, you will be able to submit your data between 9th December 2019 and 9th December 2020.

What you should do now?

You should register for Connect (if you aren’t already registered), and you need to start considering how you will collate the data required for each of your firm’s Directory persons. If you have any questions on any of the above, let us know!

As for the first 12 months, the Financial Services Register will be out of date to improve the information available for firms and customers you might want to show your advisers on your website.

Tom Richmond – Technical Consultant