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Retail Distribution Review (RDR)

Ensuring transparency and fairness in the investment industry

Retail Distribution Review: who is affected?

The requirements described in the Retail Distribution Review (RDR) apply to retail investment advisers. Retail investment advisers are defined by the FCA as employees who carry on activities, 2, 3, 4, 6, 12 and 13 in Appendix 1.1.1R to the Training and Competence Handbook.

These activities relate to designated investment business carried on for a retail client. The designated investment business includes advising and/or advising and dealing in securities, derivatives and packaged products.

A retail client is defined by the FCA (in COBS 3.4.1) as a client who is not a professional client or an eligible counterparty.

Information about the scope of the Training and Competence requirements can be found here.

The information is designed to act as a general guide to the RDR’s coverage and geographic scope. The information should not be relied upon for compliance purposes. Users should ensure that they seek additional advice on their compliance requirements relating to the RDR.

The solutions described below are relevant for those advising and dealing in securities and derivatives. 

Individuals wishing to advise in packaged products (not Collective Investment Schemes) will need to find an alternative qualification route. 

 

CFA

 RDR compliance with the CFA and IMC

The FCA (formerly FSA) has approved the CFA plus IMC Unit 1: The investment environment, as RDR compliant for those advising and dealing in securities and derivatives.

The combination of these two qualifications is listed by the FCA (on the Appropriate Qualifications table) as fully meeting requirements of the Retail Distribution Review (RDR). Note that this works in combination; IMC Unit 1 or the CFA alone are not RDR compliant.

RDR compliance is also achieved by combining IMC with other RDR specialist examinations. 

The IMC became a level 4 qualification on 1 September 2010; all exams taken from this date test the version 8 syllabus. The level 4 IMC exam is available to book now. Find out more about study materials here.

Retail practitioners who took both the CFA and the ‘old (Level 3) IMC were required to undertake a continuing professional development gapfill session in oreder to ‘fill the gaps’ and to be come RDR compliant. The gapfill course was phased out in December 2019.

RDR compliance with IMC and CFA

Holders of the CFA can gain RDR compliance in the following ways: 

  • CFA + IMC Unit 1: the investment environment (level 4)
  • CFA + Full IMC (level 3) Unit 1 + CPD gapfill*

* Please be advised that the gapfill sessions are no longer available.

CFA Level 1 holders

RDR compliance with CFA Level I and IMC

The FCA (formerly FSA) has approved Level I of the CFA Program, plus the full IMC qualification at level 4, as RDR compliant for those advising and dealing in securities and derivatives.

The combination of these two qualifications is listed by the FCA (on the Appropriate Qualifications table) as fully meeting requirements of the Retail Distribution Review (RDR). Note that this works in combination; IMC (level 4) or CFA Level I alone are not RDR compliant.

 

RDR compliance is also achieved by combining IMC with other RDR specialist examinations. 

The IMC became a level 4 qualification on 1 September 2010; all exams taken from this date test the version 8 syllabus. The level 4 IMC exam is available to book now. Find out more about study materials here.

Retail practitioners who took both the CFA Level 1 and the ‘old (Level 3) IMC were required to undertake a continuing professional development gapfill session in order to ‘fill the gaps’ and to be come RDR compliant. The gapfill course was phased out in December 2019.

RDR compliance with IMC and CFA

Holders of CFA Level I can gain RDR compliance in the following ways: 

  • CFA Level I + Full IMC (level 4)
  • CFA Level I + Full IMC (level 3) + CPD gapfill *

* Please be advised that the gapfill sessions are no longer available.

IMC Holders

RDR compliance with IMC 

The FCA (formerly FSA) has approved the full IMC qualification at level 4 in combination with Level I of the CFA Program as RDR compliant for those advising and dealing in securities and derivatives.

The combination of these two qualifications is listed by the FCA (on the Appropriate Qualifications table) as fully meeting requirements of the Retail Distribution Review (RDR). Note that this works in combination; IMC (level 4) or CFA Level I alone are not RDR compliant.



Retail practitioners who took both the CFA Level 1 and the ‘old (Level 3) IMC were required to undertake a continuing professional development gapfill session in oreder to ‘fill the gaps’ and to be come RDR compliant. The gapfill course was phased out in December 2019.

RDR compliance with IMC and CFA

Holders of IMC can gain RDR compliance in the following ways:

  • IMC (level 4) + CFA (IMC Unit 2 is exempted for holders of the CFA)
  • IMC (level 3) + CFA Level I + CPD gapfill *

* Please be advised that the gapfill sessions are no longer available.

ASIP holders

IIMR Associate Examinations

Just as investors now recognise the CFA designation as the definitive standard for measuring competence and integrity in the fields of portfolio management and investment analysis, so the ASIP designation was recognised in the UK market between its introduction in 1979 and its withdrawal in 2002. 

Broadly equivalent to the CFA qualification in content and in rigour, the associate examination was phased out following the 2000 merger of IIMR and LSIP by which the present society was formed. The society continues to support the ASIP designation as a clear mark of professional excellence. 

Associates of the Society who passed the IIMR Associate Examinations (ASIP by examination) benefit from the fact that the FCA has included this achievement in the list of Appropriate Qualifications leading to RDR qualified status. The Associate Examinations meet RDR requirements in terms of level (i.e. higher than the level 4 minimum requirement) and size of qualification. However there remain some areas of RDR content that was not covered in the Associate Examinations or needs updating before the full RDR requirements are met. This content needed to be covered by structured Continuing Professional Development (CPD) gapfill amounting to 2-3 days of structured training and some additional reading tasks. 

Detailed information on which gaps needed to be filled and guidance on how they were filled is contained in a  downloadable pdf document

Individuals wishing to complete the additional reading tasks should contact CFA UK at info@cfauk.org.

For additional clarification on your qualification status with regards to the RDR, please email CFA UK, including the dates of your examinations if possible. Please note that archived records will be required, and your request may take several weeks to process.

Gap fill ended 1 December 2019

CFA UK no longer offers gapfill routes for those who hold the Level 3 Investment Management Certificate (IMC) or ASIP holders.

Gapfill courses completed by those who registered prior to the 1st of December 2019 registration deadline and completed prior to the 28th of February 2020 completion deadline, remain valid for RDR purposes’

Further information is available here.