Key RDR professionalism rule in force from July

20 January 2011

Firms will be obliged to inform the FSA if any of their advisers fall below its competence or ethical standards from July, as the regulator also confirms all retail investment intermediaries must carry a Statement of Professional Standing (SPS).

The rule was originally due to be introduced this month but the FSA says the weight of responses it received on the issue has prompted its decision to back-date it. It is part of the FSA's Policy Statement on professionalism, out this morning.

The regulator has also confirmed retail investment advisers will need to hold a Statement of Professional Standing (SPS) if they want to give independent or restricted advice after January 2013.

The statement will provide customers with evidence that the adviser subscribes to a code of ethics, is qualified, and has kept their knowledge up to date. It will be issued by FSA-accredited bodies which satisfy the following criteria:

• they act in the public interest and further the development of the profession;
• they carry out effective verification services;
• they have appropriate systems and controls in place and provide evidence to us of continuing effectiveness; and
• they cooperate with the FSA on an ongoing basis.

Sheila Nicoll, the FSA's director of conduct policy, says: "When advisers open for business in January 2013, a Statement of Professional Standing will be a vital indicator for customers that the person they are dealing with is subscribing to a code of ethics, has up-to-date knowledge, and is appropriately qualified".

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