What are the regulatory training and competency requirements for Information Givers and how will these affect investment managers?
The implementation of the second Markets in Financial Instruments Directive (Mifid II) into UK regulations from 3 January 2018 introduces additional training and competency requirements for those ‘giving information’ to clients.
It also introduces requirements for staff giving investment advice. However, following the introduction in the UK of the Retail Distribution Review by the FCA, UK authorised financial advisers already meet the ESMA training and competency requirements.
Further information on the nature of the requirements for both those giving information and investment advice can be found here.
How will this affect those managing investments?
The ESMA guidelines provide a number of examples of the types of roles which would not be considered to be information givers. For example, back-office functions where there is no direct client contact is an example given(1). It will be up to firms to determine who falls into the category of being an ‘information giver’.
The indications are that firms will categorise investment managers as information givers and they will therefore need to meet the training and competency requirements.
What are the requirements that need to be met?
The ESMA guidelines establish minimum standards for the assessment of knowledge and competence for staff providing relevant services. The FCA, as the Competent Authority in the UK, is integrating the guidelines into their FCA Handbook.
The guidelines state the need for proportionate application of the knowledge and competency requirements, and that there should be flexibility for employees in how the guidelines are achieved(2).
The ESMA guidelines also provide criteria for knowledge and competence. The IMC provides broad coverage of the ESMA criteria for both those ‘giving information’ and ‘investment advice’. However, it is important to note that it will be up to firms to determine the proportionate application of the requirements. In particular with regards to the specific level and intensity of knowledge and competency expected for any given role. As a generic and publicly available qualification, the IMC will not cover specific product related areas particular to a firm.
This mapping document is for use by firms looking to understand how and where the IMC covers the criteria. If you would like to discuss your training and competency needs further with CFA UK please contact us at firstname.lastname@example.org.
- See Part V. Annex 1
- Note the definition of an ‘Appropriate qualification’ includes a qualification or other test or training course that meets the criteria set out by the guidelines.