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- Robert Bell
Conduct Rules Training – What does good look like?
In December 2019, the Approved Persons Regime was replaced with the Senior Managers and Certification Regime (SMCR) for most solo-regulated financial services firms. The Regime is designed to improve standards of conduct and behaviour and to provide a clear framework for individual accountability for almost all staff within a firm. One of the three components of the Regime is the Conduct Rules. Due to an implementation date extension, all staff had to have been trained on the Conduct Rules by March 2021. Refresher training should be completed at least annually, and as such, all financial services firms should ensure that their staff have undertaken this training by 31 March 2022.
Part of the obligation imposed on firms includes the requirement to inform staff about the Conduct Rules that apply to them. This can be a challenge partly because of the all-encompassing nature of the Conduct Rules – almost all staff within a firm are bound by them. In practice this means that virtually every member of staff will need to be provided with training, with documented evidence that training was delivered and understood.
The aim of training is to provide assurance that staff understand which rules apply to them, and how they apply practically to their role. Training should go deeper, and teach what good practice looks like, and what a breach looks like, as well as making staff aware that they are able to speak up if they see poor behaviour that is not in the spirit of the Conduct Rules.
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There are two tiers of rules. The first applies to almost all members of staff, with some exceptions, such as reception staff who do not undertake financial services work, reprographics and IT staff. This tier – the Individual Conduct Rules – set the overarching standards for behaviour in financial services firms. This tier also applies to Certification Staff and to Senior Managers. It is critical that training explains how these rules apply practically. The second tier is the Senior Managers Conduct Rules, and these apply only to those with a Senior Management Function. One of the rules in this tier also applies to non-executive directors.
Training should be reinforced regularly – it cannot be a one-and-done session. This is particularly the case with new starts. Those who are only just getting to grips with their new roles should be provided with training that helps them to understand how their role fits with the Conduct Rules in practice. Ideally, training should be re-visitable so that staff can revise the rules, scenarios and expectations once they are familiar with their day-to-day work.
The FCA have made clear that they expect training to put the Conduct Rules firmly into the wider context of the Senior Managers and Certification Regime, so that all staff are aware of the importance of the rules, and that they represent a ‘sea-change’ in regulation and what is expected of every staff member.
Ideally, training should include scenarios that reflect real-world situations. Whichever training option you choose, it should engage the audience. Simply setting out what the rules are is not likely to be good enough. Involving staff in their training, asking them to put themselves into scenarios to think about what the rules mean for staff working with clients, personal data and vulnerable customers, is the basic expectation.
Using training material in which positive messages are the bedrock is paramount. For all staff, getting to grips with the reality that breaches of these rules could leave them open to disciplinary action is difficult. The rules themselves were brought in off the back of a lack of accountability during the financial crisis, so the rules can feel like an extra imposition over and above the already stringent expectations of the FCA. However, the rules are there to guide firms towards healthy culture, a direction that will positively benefit staff.
The focus on the use of skill and care could lead staff to worry that they might have to work harder now for no extra benefit. So using training material that shows staff what this looks like in practice will provide reassurance that they are able to meet this rule in the normal course of their work.
Our courses are designed to help staff at all levels understand what the conduct rules are, why they are important and what is expected of them. At the core of each course is what accountability and good conduct look like in practice, with clear explanations, realistic scenarios. Reassurance that learners have understood the training is provided through quizzes and a final assessment.
Our training is accessed via our online portal, meaning that every staff member can take their training at a time that is convenient to them. Once training has been completed, staff can access the learning from the course following completion.
We offer two online Conduct Rules courses, which allow Senior Managers and Certification and all other staff to access and complete the training at their own convenience, ideal for those who want to complete the training in their own time, and to come back to it to refresh later on. They provide clear and comprehensive training in the Rules, including a mix of videos, small amounts of text and plenty of scenarios to demonstrate how the rules apply practically.
For large groups, we can offer a simplified enrolment service and pricing, simply email Robert.bell@rbcompliance.co.uk.
