Minimum Competence

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Minimum Competence Requirements

The minimum competency requirements commenced in 2011.  They provide for minimum professional standards for persons providing certain financial services, particularly those dealing with consumers.

The requirements came into effect in December 2011 and apply to regulated firms and persons  carrying out controlled functions within those firms who

  • provide advice to consumers and retail financial products
  • arrange or offered to arrange retail financial products for consumers
  • undertake a specified function.

An addendum to the minimum competence requirements was published in 2014.  This includes standards for persons providing debt management services.  They include the provision of debt management services as a specified function subject to minimum competence requirements, which must be met by individuals performing debt managing service. The addendum also applies to persons providing credit servicing functions.

The Code replaced the earlier requirements published in 2007.  The code did not apply to regulated firms who provide services to customers who are not consumers.  In this context, consumers are consumers in the conventional sense and also businesses and corporates and businesses with a turnover of less than €3 million.

Grandfathering

The 2007 requirements provided for grandfathering for those with four years experience in the eight-year period to 2007.  Firms were obliged to asses whether individuals met the criteria.

Grandfathering and certification of experience continued to the end of 2012 subject to completion of the requisite CPD requirements from 2008 forward. A regulated firm must keep records in respect of staff members including those who claim exemptions.

New Entrants

New entrants are subject to requirements in relation to initial training and supervision.  They must take part in a training program organized by the employer relevant to the relevant function.  Alternatively, they must have obtained the recognized qualifications for that function.

The length of the initial period must be based on an assessment of the performance of the entrant concerned and the nature and complexity of the functions, their knowledge and compliance by the individuals regulatory and legislative requirements.

The new entrant must be under direct supervision of a qualified or grandfathered person for an initial period on undertaking activities which are subject to standards.  The level of supervision may be reduced over time.

Documentation regarding advising on, arranging or offering to arrange financial products must be checked and signed off by qualified or grandfathered persons.

A new entrant must work towards a relevant recognized qualification.  It must be obtained within four years of commencement of training.

Particular Obligations

Firms must put in place policies and procedures to ensure that entrants are monitored and subject to supervision.  Meetings must be held between supervisors and entrants at regular intervals, and contact must be maintained.

The Code provides for an obligation of firms to ensure the persons acting on their behalf comply with standards when exercising a relevant function. Where the firm takes responsibility for tied agents and others, it must ensure compliance with the code in respect of those persons.

Records

The firm is required to maintain records of how accredited persons comply with the standards, e.g., qualifications, grandfathered status prescribed in the script and the functions which they perform.

Records must be maintained in respect of entrants which must include

  • the date of commencement of function,
  • length of the initial period of supervision,
  • criteria for reduction of supervision,
  • details of recognized qualification,
  • details of qualifications obtained,
  • details of supervision.

Certain Functions

A person performing a controlled function within a narrow set of criteria according to a prescribed script in effect is subject to lower standards.  He must act in accordance with the script devised by a qualified or grandfathered person.  He must have completed training relevant to the function or obtained a relevant qualification. He must complete ongoing training

On a request for further information and advice outside the script, he must revert to a qualified person. The person must act under the supervision of a qualified or grandfathered person.

Ongoing Requirements

A person subject to the code must comply with 15 formal hours’ CPD per year.  The grandfathered person must maintain the same number of hours.

If a person is holding a recognised qualification with a professional designation dependent on the ongoing maintenance and completion of CPD may be taken to have complied with the function where he successfully completes the CPD relevant to his recognized qualification.

At least one hour annually must relate to ethics. There are requirements for making up shortfalls in the following year.

The formal CPD must relate to the function undertaken by the individual.  They must be obtained by attending seminars, conferences, workshops, or courses dealing with the relevant topic.  They must be accredited by the provider of the recognized qualification or one of the professional and educational bodies providing recognized qualifications.

A regulated firm must have procedures to ensure compliance with the requirements.  The line manager must review compliance.  Certain issues of relevance breach must be recorded in the person’s file.

The Central Bank has the power to make or verify compliance with CPD.

CPD records must be maintained.  This includes records of monitoring compliance, records demonstration compliance, details of breaches.

If a person fails to meet his CPD requirements leading to the removal of professional designation, he must be deregistered.  Similarly, other persons who are grandfathered et cetera who fail to meet CPD requirements must be deregistered.

Competence Requirements I

The Central Bank recognises the standards of qualification which meet the requirements of the code.  A person or entity may become an accredited provider.  There are a number of providers providing for, who provide relevant qualifications.

Certain provisions apply to all regulated firms. Other specific provisions apply respectively to retail credit firms, investment firms, investment intermediaries, insurance and mortgage intermediaries.

Where a consumer seeks confirmation from a firm that the person providing the services meets the standards of the code, the firm must provide the consumer with a certificate in a prescribed form.

The Central Bank recognises a number of institutions and professional bodies.

There are eight broad categories of retail financial products.  They are

  • life insurance
  • pensions
  • savings and investments
  • personal general insurance
  • commercial general insurance
  • private medical insurance and associated industries
  • housing loans
  • consumer credit agreements.

Competence Requirements II

The Code provides for core competencies in which persons must have the requisite ability.  They include requirement relative to each of the above category.  They include

  •  legal areas,
  •  regulation,
  • financial planning,
  • underwriting,
  • savings and investments,
  • policies and theory,
  • taxation,
  • legislative compliance, et cetera.

Each particular areas is defined with reference to particular matters which must be complied with in respect in that area.