Sponsor competence rules come into force on 1 February


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Summary: Today the FCA published two useful Technical Notes to assist sponsors in complying with the new sponsor competency rules which come into force on 1 February.

Now is a good time for sponsors to review their internal processes and consider whether they have the right number of employees who can do what they need. These people should demonstrate the skills, knowledge and expertise to understand the competency sets, identify any gaps in knowledge and consider further training.

On 1 February the new rules on sponsor competency will come into force. The key sponsor competence requirements are:

  • at least one sponsor declaration in the last three years;
  • systems and controls in place that are designed to ensure that the five ‘competency sets’ are met; and
  • a minimum of two key contacts who satisfy the key contact requirements.

Today, the FCA published two Technical Notes to assist sponsors in complying with the new sponsor competence requirements.  The guidance is helpful and considers key questions sponsor firms may have on the new rules, for example:

  • will each employee involved in the provision of sponsor services be required to demonstrate an understanding of all the competency sets?;
  • what level of records do sponsors need to retain to evidence the steps they have taken to comply with these new obligations?; and
  • how involved would the FCA expect the key contacts to be in communications with the UKLA?

Guidance on the competence requirements set out under LR 8.6.7R(2)(b) (TN/714.1)

Practical implications of competence requirements for sponsors and applicants (TN/715.1)

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