• INDI Chapter 5 INDI Chapter 5 Training and competency

    • INDI Part 5.1 INDI Part 5.1 Principles for training and competency

      Guidance

      Individuals who perform controlled functions or the customer-facing function need to have the appropriate competency elements of skills, knowledge and experience. Individuals having these competency elements strengthen the protection given to customers and stakeholders. Authorised firms need to prudently manage the risks that may arise as a result of individuals performing a controlled function or the customer-facing function.

      Amended by QFCRA RM/2019-4 (as from 1st January 2020).

      • INDI 5.1.1 Principle 1 — senior management responsibility

        The senior management of an authorised firm must ensure that the firm's policies, procedures, systems and controls appropriately and adequately address the training and competency requirements in this Chapter.

        Derived from QFCRA RM/2014-5 (as from 1st January 2015)

      • INDI 5.1.2 Principle 2 — training and competency programme

        An authorised firm must design, deliver and maintain an appropriate ongoing training and competency programme for individuals who perform a controlled function or the customer-facing function.

        Derived from QFCRA RM/2014-5 (as from 1st January 2015)

      • INDI 5.1.3 Principle 3 — assessment of competencies

        An authorised firm must undertake initial and ongoing assessment of each individual's competencies to perform a controlled function or the customer-facing function.

        Derived from QFCRA RM/2014-5 (as from 1st January 2015)

      • INDI 5.1.4 Principle 4 — training

        An authorised firm must ensure that individuals who perform a controlled function or the customer-facing function receive or undertake sufficient training and continuing professional development.

        Derived from QFCRA RM/2014-5 (as from 1st January 2015)

      • INDI 5.1.5 Principle 5 — record-keeping

        An authorised firm must be able to provide documentary evidence of its compliance with the requirements relating to the training and competency of individuals who perform a controlled function or the customer-facing function.

        Derived from QFCRA RM/2014-5 (as from 1st January 2015)

    • INDI Part 5.2 INDI Part 5.2 Training and competency programme

      • INDI 5.2.1 Appropriate programme to be delivered

        (1) An authorised firm must design, deliver and maintain an appropriate ongoing training and competency programme for individuals who perform a controlled function or the customer-facing function.
        (2) The programme:
        (a) must be relevant, timely and appropriately structured;
        (b) must ensure that individuals who perform a controlled function or the customer-facing function are aware, and have an appropriate understanding, of:
        (i) their roles, responsibilities and obligations;
        (ii) the firm's processes in so far as they apply to each individual's role;
        (iii) any reports that they are required to make; and
        (iv) the sources of information for making the reports; and
        (c) must include policies, procedures, systems and controls on how the firm is to decide whether individuals are competent to perform a controlled function or the customer-facing function.
        (3) In designing its training and competency programme, the firm must consider the following:
        (a) the individuals' differing needs, experience, skills and abilities;
        (b) their differing roles and levels in the firm;
        (c) the degree of supervision over, or independence exercised by, them;
        (d) the availability of information needed for them to perform their roles;
        (e) the nature, scale and complexity of the firm's business, including:
        (i) the products and services it offers or provides, and proposes to offer or provide; and
        (ii) changes to those products and services and to the market;
        (f) the firm's customers;
        (g) the outcome of reviews of the individuals' training and competency;
        (h) any analysis showing areas where training needs to be enhanced;
        (i) the regulatory system, including any recent, or reasonably expected, changes to it.
        (4) In designing the programme, the firm may also consider any other relevant matter.
        Amended by QFCRA RM/2019-4 (as from 1st January 2020).

      • INDI 5.2.2 Training must be maintained and reviewed

        (1) An authorised firm's training and competency programme must include ongoing training to ensure that individuals who perform a controlled function or the customer-facing function:
        (a) maintain their competencies;
        (b) are kept up to date with developments relating to their functions; and
        (c) are trained on any changes to the firm's policies, procedures, systems and controls.
        (2) The firm must, at regular and appropriate intervals, review and evaluate:
        (a) its training and competency programme and training and competency document for quality and effectiveness; and
        (b) those individuals' training needs, to ensure that those needs are met.
        Derived from QFCRA RM/2014-5 (as from 1st January 2015)

      • INDI 5.2.3 Training and competency document

        (1) An authorised firm must prepare a document (training and competency document) describing its training and competency programme.
        (2) A firm's training and competency document must include:
        (a) the requirements, characteristics and role of each of the following functions:
        (i) a controlled function for which a rule requires the firm to have an individual approved;
        (ii) any other controlled function that an individual performs for the firm;
        (iii) if the firm has 1 or more individuals who perform the customer-facing function — that function;

        Guidance

        Requirements: what an individual should have to perform the function — for example, a certain level of knowledge, experience and training

        Characteristics: what an individual should be able to do in performing the function — that is, his or her skills (technical and behavioural).

        Role: what the individual is expected to do — for example, the function's duties, responsibilities, reporting lines and position within the firm.
        (b) how the firm is to satisfy itself that each individual who performs a controlled function or the customer-facing function has, and continues to have, the competencies required to perform the function;
        (c) the continuing professional development to be provided for such individuals and the review and evaluation of their training needs;

        Note See rule 5.3.3 (Continuing professional development).
        (d) how the firm is to ensure that it complies, and can demonstrate its compliance, with its training and competency programme;
        (e) how, and in what circumstances, the firm will review the programme and the document, including who is to carry out the review and evaluation and when; and
        (f) how, and in what circumstances, the firm will revise the programme and the document, including who is to approve any revision.
        (3) Revision includes amendment and replacement.
        Derived from QFCRA RM/2014-5 (as from 1st January 2015)

      • INDI 5.2.4 Firm must comply with its training and competency programme

        (1) An authorised firm must comply with the requirements and procedures in its training and competency programme and training and competency document as revised from time to time.
        (2) The individual approved to perform the compliance oversight function for an authorised firm:
        (a) must monitor, on an ongoing basis, the firm's compliance with its training and competency programme and training and competency document; and
        (b) must report to the firm's governing body at least once a year about the firm's compliance with that programme and that document.
        Derived from QFCRA RM/2014-5 (as from 1st January 2015)

    • INDI Part 5.3 INDI Part 5.3 Training and other ongoing obligations

      Notes

      1 Principle 4 (see rule 5.1.4) requires an authorised firm to ensure that individuals who perform a controlled function or the customer-facing function receive or undertake sufficient training and continuing professional development.
      2 Principle 5 (see rule 5.1.5) requires an authorised firm to be able to provide documentary evidence of its compliance with the requirements about the training and competency of such individuals.
      Derived from QFCRA RM/2014-5 (as from 1st January 2015)

      • INDI 5.3.1 Obligation to review competencies

        (1) An authorised firm must, from time to time in accordance with its training and competency document, ensure that each individual who performs a controlled function or the customer-facing function:
        (a) continues to have the competencies required to perform the function; and
        (b) continues to be a fit and proper person to perform the function.
        (2) The following rules apply to an authorised firm in deciding whether an individual continues to have the competencies, and continues to be a fit and proper person:
        (a) to perform a controlled function:
        •   rule 3.1.2 (How firms to make competence assessments)
        •   rule 3.1.5 (How firms to make fitness assessments);
        (b) to perform the customer-facing function:
        •   rule 4.1.2 (How firms to make competence assessments)
        •   rule 4.1.5 (How firms to make fitness assessments).
        Derived from QFCRA RM/2014-5 (as from 1st January 2015)

      • INDI 5.3.2 Obligation to review training and development needs

        (1) An authorised firm must, from time to time in accordance with its training and competency document, assess the training and development needs of each individual who performs a controlled function or the customer-facing function.
        (2) The interval between assessments of an individual's training and development needs must not be longer than 12 months.
        Derived from QFCRA RM/2014-5 (as from 1st January 2015)

      • INDI 5.3.3 Continuing professional development

        An authorised firm must ensure that each individual who performs a controlled function or the customer-facing function receives sufficient continuing professional development, appropriate to the nature and complexity of his or her role, to ensure that he or she continues to have the competencies required to perform the function.

        Examples of continuing professional development

        1 in-house training
        2 industry literature review
        3 academic studies
        4 obtaining professional qualifications
        5 technical training for roles that are highly technical or that involve constant changes in legislation or regulatory practice.

        Note The authorised firm's training and competency document must state its policies and procedures about continuing professional development (see rule 5.2.3 (2) (c)).

        Derived from QFCRA RM/2014-5 (as from 1st January 2015)