The Deadline for Conduct Rules Training is Approaching
Given the relative absence of regulatory changes or consultation over the previous 12 months, apart from the expected Brexit confirmations and amendments to account for the effects of Coronavirus, the last couple of weeks have seen a return to business as usual from the Financial Conduct Authority. The Woolard Review signals that some updates to legislation and changes to the perimeter are on the horizon, and on 23 February, the FCA published its final guidance paper on the treatment of vulnerable customers. There has been a fair bit to concentrate on over the previous six weeks, but it’s important not to lose sight of the upcoming deadlines.
The closing date for the submission of Directory Persons data is 31 March 2021. Firms wishing to submit data for 10 or more Directory Persons should use either the multiple add template or the multiple amend template, and the deadline for this is 18 March. More information is available here: https://www.fca.org.uk/firms/directory-persons.
For solo-regulated firms, training for all staff on the Conduct Rules needs to have been completed by 31 March 2021. This deadline was pushed back from December 2020 to allow firms additional time for training, given the impact of Coronavirus. Although this is the ultimate deadline, the FCA expects that, where possible, all staff are trained on the Conduct Rules as soon as is feasible. Senior Managers should already have been trained in the Conduct Rules that apply to them and how they impact their roles from implementation of the Senior Managers and Certification Regime in December 2019.
After the deadlines are met for this year, ongoing concerns include updating HR policy and procedure to include the provision of training on the conduct rules to all new starters, and where someone is promoted or there is an internal move, that their current training is evaluated to be sure that it sufficiently covers their new role. In the case of individuals moving up into an SMF role, then training that covers the Senior Manager Conduct Rules should be provided.
The rules (within COCON) state that the firm must do two things. Firstly, they must make sure that everyone to whom the rules apply are told which rules apply to them, and secondly, they must 'take all reasonable steps' to ensure those people understand how the rules apply to them, for example, by providing training that covers each rule that applies to the individual, and how the rule applies in practice.
Timescales for provision of Conduct Rules training for new starters aren’t set out by the FCA, but it would be reasonable to require it to be completed within the usual timescales of induction training. The spirit of the Conduct Rules is that all staff should know they apply, what they are, and how they might apply to the work they do before they begin that work.
Training provided should, then, cover what the rule is, but also what abiding by the rule might look like in practice, and crucially, what a breach of the rule could look like in the context of work. The rules themselves are, intentionally, fairly high-level and so don’t immediately or obviously link to someone’s daily role. While most people, for example, might know that acting with integrity means doing the right thing, it might not be clear to an individual how far this might go in customer-facing roles, or what it might mean for a product designer. So the key in delivering effective training is to interpret the rule in a meaningful and practical way, so that staff are clear about what it means in terms of their roles.
Another important point the training should cover is what a breach of the rule looks like. This is especially helpful with some of the broader rules, where the wording of the rule itself does not give a clear indication of what is actually expected. This could involve clarifying that, for customer-facing staff, misleading a customer by leaving out some of the information they might need to know to make a decision on the purchase of a product is a specific example of a breach of Individual Conduct Rule 1 (Integrity), but that equally, misleading colleagues about the root cause of an issue would also be a breach. Real-world examples support a more comprehensive understanding of the spirit of the rule, as well as supporting staff to understand what applying the rule looks like in practice.
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.firstname.lastname@example.org.