It also plans to review non-RDR related exams standards in areas including mortgages, insurance and corporate finance, as part of wider proposals to tackle ‘competence failings' found in some firms.
The plans, included in today's CP10/12 Competence and ethics paper, will see the removal of some transitional provisions which allow individuals to operate without formal qualifications, due to arrangements under their previous regulator.
These arrangements will now be scrapped and a thirty month deadline imposed which will also apply to all activities within the TC source book.
Its deadline will not extend to retail investment advisers assessed as competent on 30 June 2009 and their end of 2012 RDR deadline will still apply.
However, people who joined the retail investment advice sector after 30 June 2009 will need to comply with its proposed thirty month time limit. This will start from the date final rules are published, likely to be the end of 2010.
Individuals who fail to meet the time limits must cease associated regulated
activity until such time as they do pass.
The FSA does not propose applying a time limit within which an individual needs to be
assessed as competent, which its states 'is more than just passing a qualification'.
This will remain the firm's responsibility, based on their assessment of the risk associated with an individual continuing to operate under supervision.
"We do not expect individuals to operate under supervision indefinitely or revert to operating under supervision as a means to avoid our requirements under RDR professionalism," the paper states.
The regulator will also carry out a risk-based review of the remaining non-RDR related appropriate examination standards to ensure they remain up to date and relevant.
"We are also aware that, at present, written examinations are the primary qualification assessment methodology used but we can see no reason why we should not permit use of other assessment methodologies for non-RDR activities."
The proposals come after the regulator says it is finding "competence failings" in its thematic work, especially where individuals' competence has not kept pace with
market innovations and developments.
Research it carried out indicates firms feel the FSA does not place enough emphasis on TC requirements in general.
"With this in mind we will be moving the TC sourcebook to the high-level standards of our handbook. This reflects the importance we place on competence and places TC in
the context of other associated requirements, such as the approved persons regime.
"The changes we propose to the TC regime will standardise the baseline of competence so that more individuals in that regime will be required to hold a
qualification or successfully pass a qualification within a set time period."
Attend the International IPMI Breakfast Briefing on Wednesday 3rd December 2014 in London. Click HERE to register your FREE place now.
Dedicated to the health insurance and protection market, COVER provides highly authoritative content, insightful analysis, independent features to keep you operating at the cutting edge of your industry.
Stay up to date with all the latest news, product development and changes happening within the protection and health insurance market.
All of the latest news and features on all aspects of the protection and health insurance market are available from our print edition.