The FCA Directory - what you need to know

Introduction

The FCA Directory is a public register maintained by the FCA.? Broadly, it is designed to make information on individuals who perform certification functions within the financial services industry both public and accessible.? It is different from the Financial Services Register (which only contains details relating to Senior Managers).[1]

The reporting requirements relating to the FCA Directory can be found in SUP 16.26, under which all SM&CR firms must submit to the FCA (and keep up-to-date) certain information relating to their “Directory Persons” for publication in the FCA Directory.

Definition of “Directory Persons”

“Directory Persons” are defined as being:

1. all certification staff, and
2. directors who are not performing a Senior Manager Function (both executive and non-executive), and
3. other individuals who are sole traders or Appointed Representatives where they are undertaking business with clients and require a qualification to do so.[2]

What information is published within the FCA Directory?

Information relating to a “Directory Person” which is made public on the FCA Directory includes[3]:

1. Employer details,
2. Restrictions applying to a firm’s regulated activities,
3. Individual’s name (title, first name, middle name, surname and name commonly known by (if different)),
4. Individual Reference Number (IRN): but only if the person has one,[4]
5. Passport number:* note that this is only required if (a) the Directory Person does not have a National Insurance Number, or (b) only a passport number, and not a National Insurance Number, has previously been provided,
6. National Insurance Number,*
7. Date of birth,
8. Relevant role(s) currently held: for (a) certification employees - ALL certification function(s) for which the individual has been assessed as being fit and proper and for which they hold a fit and proper certificate at the time of the submission must be reported to the FCA, (b) non-SMF directors - the firm should state “Director of firm who is not a certification employee or a SMF manager”, (c) sole traders - the firm should state “Sole trader dealing with clients for which they require a qualification”, and (d) appointed representatives - the firm should state “Appointed representative dealing with clients for which they require a qualification”.[5]
9. Start date of each role - this should be the date on which the individual was certified by the firm,[6]
10. End date of each role,
11. Type of business the individual is qualified to undertake (if qualifications are required) - firms must report ALL of the relevant qualifications which the Directory person requires and holds so as to carry on the role that they perform (see TC App 1.1),
12. Workplace location(s)** - this information must be provided in the form of a post code.? However, post codes themselves will not be published.? Instead, the FCA will only publish to town/city to which the post code relates. If a firm believes that a person would be put a risk by publication of their workplace location the firm does not have to provide the postcode (or can provide the postcode of their head office instead).
13. Customer engagement method(s)** - the three customer engagement methods are “face-to-face”, “telephone” and/or “online”.
14. Membership of relevant accredited bodies** - the “Accredited bodies” are: (a) The CFA Society of the UK, (b) The Chartered Institute for Securities and Investment (CISI), (c) The Chartered Banker Institute (CBI), (d) The Chartered Insurance Institute (CII), and (e) The London Institute of Banking and Finance (LIBF). It is the firm’s responsibility to ensure that relevant staff are active members of the relevant accredited bodies, before providing this information to the FCA.? It is for the firm to decide how best to verify this information.[7]
15. Regulatory sanctions and prohibitions, and
16. Date information was last updated.[8]

?* will not be made public – used for ID verification purposes only

**only for customer-facing roles requiring qualifications.[9]

If neither a person’s National Insurance Number nor their passport number is available then that person’s information cannot be submitted to the FCA Directory.? There are no exceptions to this rule.[10]? However, for those persons who do not have a National Insurance Number or a passport number (which the FCA expects to be very rare), the firm may apply to the FCA for a waiver.? This waiver will only be granted if the firm has “exhausted all possible means of obtaining this information”.? In addition, the FCA would expect (a) the firm to supply “full alternative identification verification” which was undertaken as part of the individual’s certification, and (b) a thorough explanation as to why it is impossible to supply either a National Insurance Number or a passport number.[11]

Keeping the FCA Directory up-to-date

Under the Conduct Rules, Directory Persons are responsible for providing accurate information to their employer.? However, it is the responsibility of firms to verify the Directory information provided to them and to keep the information which they must submit to the FCA Directory up-to-date.[12]? The Senior Manager who hold the Prescribed Responsibility for the firm’s performance of its obligations under the employee certification regime will ultimately be accountable for the information provided on Directory Persons.[13]

Any changes in the data required for FCA Directory entries must be updated within 7 business days of the change.[14]? In most cases, information submitted to the FCA will appear on the FCA Directory no later than the next business day.[15]? Examples of the types of change that would have to be reported include:

1. ?New joiners amongst the cohort of Directory Persons,
2. Leavers amongst the cohort of Directory Persons,
3. A Directory Person ceases to be certified or otherwise considered suitable by their firm to hold their role due to a period of prolonged leave,
4. Changes of passport numbers (which occurs on a passport renewal), and
5. Change of name.

Reporting can be made individually via the FCA’s Connect system.? Alternatively, the FCA provides a multiple entry facility (in the form of an Excel spread sheet which must be saved and submitted in .csv format).[16]? Note that a separate form must be used with respect to each firm within a group which is subject to the SM&CR. [17]

Firms which have not made any changes to their FCA Directory data in the preceding 12 months will be required to confirm that it remains up-to-date.[18]? The FCA will do this by sending automated reminder emails to a firm’s dedicated “FCA Connect” user ahead of the notification due date.[19]? The authorised user of the system will have to login and click an attestation button.

If an employee does not provide an employer with accurate information (e.g. passport number or accreditation), it may be reasonable for the firm to instigate disciplinary proceedings – probably based on a breach of individual Conduct Rule 3 (“You must be open and cooperative with the FCA, the PRA and other regulators”).? Ultimately, if a firm can’t provide the necessary data (for example, because the individual will not provide it) then the individual can’t hold the role in question, even if they have already been approved to hold that role.[20]

Fines for failure to keep the FCA Directory up-to-date

FCA reporting provisions apply to the FCA Directory.? As such, an administrative fee of ￡250 will be charged to cover the costs of work undertaken by FCA staff to remediate data which is either submitted late or is inaccurate.[21]? However, for more serious cases (such as repeated breaches) the FCA reserves the right to take whatever action it considers appropriate (which may include use of disciplinary powers, imposition of penalties, public censure and the removal of permissions).[22]

When submitting data on Directory Persons, the firm will be required to confirm that the information being reported is accurate and complete.? Be aware that it is a criminal offence, knowingly or recklessly, to give the FCA information that is materially false, misleading or deceptive (Sections 398 and 400 of FSMA 2000).

Let Corterum help

The FCA considers that keeping the FCA Directory up-to-date is something that should be fairly easy for firms to get right.? In fairness, in this estimation, it’s probably correct.

The real challenge around keeping the FCA Directory up-to-date emanates from the 7 business day deadline for notifying the FCA of any changes in a firm’s Directory Data.? Remember – this deadline is 7 business days from the DATE OF THE CHANGE.? It’s NOT 7 business day from THE DATE WHEN YOU BECAME AWARE OF THE CHANGE.? That’s quite a tight deadline.

Nonetheless, it’s fairly easy to stay off the FCA’s radar with respect to this aspect of SM&CR if you implement robust procedures around (a) training staff on when a change in their information may trigger a requirement to update the FCA Register, (b) monitoring whether changes in FCA Directory Data have occurred, (c) understanding the nature of any changes in FCA Directory Data, and (d) swiftly reporting those changes that have occurred.

Corterum can assist on all of these fronts.? The SM&CR workflow built into the system automatically prompts Directory Persons to periodically confirm that their FCA Directory data is up-to-date – keeping a full audit trail of all responses.? Our solution also scans for any changes to FCA Directory and notifies the administrator should any occur – no more flailing around in the dark.? Our FCA Directory report highlights the changes that have actually occurred and streamlines the process of submitting updates to the FCA – all at the press of a button.

Put simply, Corterum saves you time – and time is money.? In contrast to your Excel spreadsheet, it wraps robust process around SM&CR – helping you to stay off the FCA’s radar.? In doing so, it allows you to legitimately present yourself as a firm which takes its responsibilities under SM&CR seriously.? Get in contact today at [email protected] to see how we can help.

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[1] PS19/7, page 3

[2] PS19/7, page 4

[3] SUP 16.26.6R

[4] SUP 16 Annex 47BG

[5] SUP 16 Annex 47BG

[6] Directory Persons – Questions and Answers, question 1.1

[7] Directory Persons – Questions and Answers, question 4.15

[8] PS19/7, page 5

[9] SUP 16 Annex 47AR

[10] Directory Persons – Questions and Answers, question 4.2

[11] Directory Persons – Questions and Answers, question 4.3

[12] PS19/7, page 6

[13] PS19/7, page 19

[14] SUP 16.26.13R?; PS19/7, pages 7 and 16

[15] PS19/7, page 36

[16] PS19/7, page 36

[17] Directory Persons – Questions and Answers, question 1.8

[18] SUP16.26.18R?; PS19/7, page 18

[19] PS19/7, page 25

[20] Directory Persons – Questions and Answers, question 4.9

[21] PS19/7, page 18

[22] PS19/7, page 19