Source: http://www.complinet.com/qfcra/display/viewall_display.html?rbid=1557&element_id=8694
Timestamp: 2013-05-21 18:54:30
Document Index: 275845366

Matched Legal Cases: ['art 91', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4']

Location: Qatar Financial Centre Legislation > QFCRA Rules > Individuals Rules 2005 (INDI) > Glossary Individuals Rules 2005 (INDI)
Click here to view earlier versions of Individuals Rulebook (INDI).
Click here to view the forthcoming (1 July 2013) version of Individuals Rules 2005 (INDI).
Individuals Rulebook (INDI)
INDI 1:
INDI 1.1.1 Name of rules
INDI 1.1.2 Glossary
INDI 1.1.3 Application of INDI
INDI 2:
INDI 2 Guidance
INDI 2.1 Description of Controlled Functions
INDI 2.2 Additional Requirements for specific Controlled Functions
INDI 2.3 Required Functions
INDI 3:
INDI 3.1 Application to register as an Approved Individual [Deleted]
INDI 3.2 Application for modification of Approved Individual status [Deleted]
INDI 3.3 Application for withdrawal of Approved Individual status [Deleted]
INDI 3.4 Notification of removal or resignation of Approved Actuary
INDI 4:
Principles for training and competency
INDI 4.1.1 Principle 1—senior management responsibility
INDI 4.1.2 Principle 2—training and competency programme
INDI 4.1.3 Principle 3—assessment of competencies
INDI 4.1.4 Principle 4—training
INDI 4.1.5 Principle 5—record keeping
INDI 4A:
INDI 4A.1 General provisions
INDI 4A.2 Assessment of individuals for controlled functions
INDI 4A.3 Approval of individuals for controlled functions
INDI 4A.4 Conditional approval of individuals for customer facing function
INDI 5:
Training and other ongoing obligations relating to controlled functions
INDI 5.1.1 Obligation to review competencies
INDI 5.1.2 Obligation to review training and development needs
INDI 5.1.3 Continuing professional development for approved
INDI 5.1.4 Record keeping—controlled functions
INDI 6:
Performance of Controlled Functions
INDI 6.1 Multiple Appointments
INDI 6.2 Temporary Cover
INDI 6.3 Individuals ceasing to exercise controlled functions
INDI 7:
INDI 7.1 Principles of Conduct for Approved Individuals
INDI 8:
INDI 8.1.1 Approved forms to be used
INDI 8.1.2 Completion of forms
INDI schedule 1:
Competencies for controlled functions other than customer facing function
INDI schedule 2:
Competencies for customer facing function
Amended by QFCRA RM/2011-5 (as from 1st January 2012).
1. This rulebook further clarifies the statements and requirements set out in the FSR relating to the performance of Controlled Functions by individuals.
2. The Principles of Conduct for Approved Individuals is drawn up in accordance with Article 15(3) of the FSR and have the status of Rules. A breach of these principles may form the basis of disciplinary action by the Regulatory Authority. The Principles of Conduct are a general statement of the standards expected of Approved Individuals and apply directly to the conduct of business and carrying out of Controlled Functions by Approved Individuals.
3. The Principles of Conduct are not exhaustive of the standards expected. Conformity with the principles does not absolve a failure to observe other requirements in the Rules, while the observance of other requirements in the Rules does not necessarily amount to conformity with the Principles of Conduct.
4. Failure by an Approved Individual to comply adequately with the Principles of Conduct is likely to impact on the Regulatory Authority's assessment of that Approved Individual's Fitness and Propriety.
5. INDI-VER2-Sep06 incorporates amendments made by Prudential – Insurance Rulebook Rule Making Instrument No. 2006/01 (RM2006/01). See the endnotes for rulebook and amendment history.
Article 41 of FSR provides as follows:
Approved Persons performing Controlled Functions
(1) An Authorised Firm must ensure that no individual acting for:
(A) the Authorised Firm; or
(B) a contractor of the Authorised Firm
performs a Controlled Function for that Authorised Firm unless the individual is approved by the Regulatory Authority as an Approved Individual.
(2) Controlled Function means a function which involves:
(A) the exercise of significant influence over the conduct of the firm's affairs in relation to Regulated Activities;
(B) dealing directly with clients or customers in relation to Regulated Activities; or
(C) dealing with the property of clients or customers
and is specified as a Controlled Function in Rules issued by the Regulatory Authority from time to time.
(3) The Regulatory Authority shall make Rules detailing:
(A) the procedure for Application to the Authority for registration as an Approved Individual including requirements as to the form and content of the Application, any fees payable by an Authorised Firm in respect of its Approved Individuals and the procedures for modification or withdrawal of an Approved Individual's registration;
(B) principles or other requirements to which Approved Individuals are required to adhere in the performance of Controlled Functions;
(C) requirements for Approved Individuals to report to the Regulatory Authority; and
(D) the circumstances in which registration of an Approved Individual may be withdrawn at the instance of the Regulatory Authority.
INDI 1 General provisions
INDI 1.1 Application [deleted]
Deleted by QFCRA RM/2011-5 (as from 1st January 2012).
These rules are the Individuals Rules 2005 (or INDI).
The glossary at the end of these rules is part of these rules.
Note 1 There are also relevant definitions in the INAP glossary. To assist the reader, the application of a definition in that glossary would usually be indicated by the word(s) being in italics (other than bold italics).
Note 2 By contrast, the application of a definition in the glossary in these rules is not indicated by the word(s) being in italics.
Note 3 For the application of definitions, see INAP, rule 2.1.8 (Application of definitions).
Note 4 A note on or to these rules is explanatory and is not part of the rules (see INAP, rule 2.1.6 (1) and rule 2.1.7).
Note 5 However, examples and guidance are part of these rules (see INAP, rule 2.1.4 (1) (b) and (2)).
Note 6 An example is not exhaustive, and may extend, but does not limit the meaning of these rules or the particular provision of these rules to which it relates (see INAP, rule 2.1.5).
Note 7 For the effect of guidance, see FSR, article 17(4).
(a) an authorised firm operating, or applying to operate, in or from the QFC; and
(b) an individual approved, or applying for approval, to perform a controlled function.
INDI 2 Controlled Functions
INDI 2 Guidance1. Although job titles may be indicative of a function performed, the test as to whether or not an individual is carrying on any particular Controlled Function outlined under INDI section 2.1 is whether the activity or role that individual performs for or on behalf of an Authorised Firm falls within the description of that Controlled Function. 2. The Regulatory Authority is of the view that in most cases it will be prudent for an Authorised Firm to have a contractual relationship with any individual carrying on a Controlled Function for or on behalf of the Authorised Firm to govern the manner in which that Controlled Function is performed. However, an individual may carry on a Controlled Function for an Authorised Firm even if there is no contractual relationship between the individual and the Authorised Firm. For example, the regional head of an Authorised Firm's Group may have no direct contractual relationship with an Authorised Firm but may carry on the Senior Executive Function for that Authorised Firm. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 2.1 Description of Controlled Functions
INDI 2.1.1
Each of the functions described in rules 2.1.2 to 2.1.11 is a controlled function for the purposes of Article 41(2) of the FSR.
INDI 2.1.2The Senior Executive Function is the function of having overall responsibility alone or jointly with one or more individuals: (A) for the conduct of the whole of the business of an Authorised Firm; or (B) in the case of an Authorised Firm established outside the QFC operating through a branch in the QFC (a Non-Local Firm), for the business of the Authorised Firm carried out in or from the QFC. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 2.1.2 GuidanceIn most cases, the Regulatory Authority would expect an Authorised Firm to have one individual performing the Senior Executive Function. Derived from QFCRA RM03/2005 (as from 13th October 2005). Executive Governance Function
INDI 2.1.3(1) Subject to (2), the Executive Governance Function is the function of acting in the capacity of a Director, other than a Non-Executive Director, of an Authorised Firm. (2) The Executive Governance Function does not extend to Directors of a Non-Local Firm who are not responsible for the Regulated Activities carried on by that Authorised Firm in or from the QFC. Derived from QFCRA RM03/2005 (as from 13th October 2005). Non-Executive Governance Function
INDI 2.1.4The Non-Executive Governance Function is the function of holding a position on the Governing Body of a Local Firm but not having responsibility for the day-to-day direction of a Local Firm's affairs. Derived from QFCRA RM03/2005 (as from 13th October 2005). Compliance Oversight Function
INDI 2.1.5The Compliance Oversight Function is the function of having responsibility for compliance matters of an Authorised Firm as provided in CTRL section 4.3. Derived from QFCRA RM03/2005 (as from 13th October 2005). Risk Management Function
INDI 2.1.6The Risk Management Function is the function of having responsibility in relation to setting and controlling an Authorised Firm's risk exposure as provided in CTRL section 4.4. Derived from QFCRA RM03/2005 (as from 13th October 2005). Finance Function
INDI 2.1.7The Finance Function is the function of having responsibility for ensuring that an Authorised Firm complies with the Regulatory Authority's prudential requirements. Derived from QFCRA RM03/2005 (as from 13th October 2005). MLRO function
INDI 2.1.8
The MLRO function is the function of being an authorised firm's MLRO under AML/CFTR.
INDI 2.1.9The Senior Management Function is carried on by an individual who has significant responsibility either alone or with others for management and supervision of one or more elements of an Authorised Firm's business relating to its Regulated Activities other than those matters identified in INDI Rule 2.1.2 to 2.1.8. Derived from QFCRA RM03/2005 (as from 13th October 2005). Customer Facing Function
INDI 2.1.10 Customer facing function
Customer facing function is the function of carrying on 1 or more of the following regulated activities with or for a customer on behalf of an authorised firm in or from the QFC—
(c) advising on investments;
(d) arranging deals in investments;
(e) insurance mediation.
INDI 2.1.11The Actuarial Function is the function of having responsibility for monitoring, advising, investigating and reporting on risks facing an Insurer that materially impact on the Insurer's ability to meet policyholder liabilities and on capital levels.
Derived from QFCRA RM01/2006 (as from 1st October 2006). INDI 2.2 Additional Requirements for specific Controlled Functions
INDI 2.2.1The Senior Executive Function must be carried out by an individual who: (A) in the case of a Local Firm is ordinarily resident in the State; and (B) in the case of a Non-Local Firm spends an appropriate proportion of his time in the State having regard to responsibilities that the Senior Executive Function entails. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 2.2.2 [Deleted]
INDI 2.2.3Subject to INDI Rule 2.2.4, the Regulatory Authority will only register one individual for the Compliance Oversight Function in respect of an Authorised Firm. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 2.2.4The Regulatory Authority may, if it considers it appropriate in the circumstances, register more than one individual to perform the Compliance Oversight Function in respect of different internal business divisions within a large Authorised Firm provided that one individual is appointed with responsibility for the overall Compliance Oversight Function for the whole of the Authorised Firm. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 2.2.5
An individual can only be registered to perform the Actuarial Function if he also meets the following additional criteria:
(A) he is not carrying on the Controlled Functions of Senior Executive Function, Executive Governance Function or Non-Executive Governance Function of the Insurer, or of a Related Body Corporate (except when that Related Body Corporate is a Subsidiary of the Insurer);
(B) he is neither an approved auditor (under Article 85(1) of the QFC Companies Regulations or Article 37 of the Limited Liability Partnerships Regulations) for the Insurer, nor an employee or director of an entity of which that auditor is an employee or director nor a partner of that auditor.
INDI 2.2.5 GuidanceBecause of the critical role played by the Actuarial Function, additional criteria are placed on Approved Actuaries to ensure their independence, education, skill and experience.
Derived from QFCRA RM01/2006 (as from 1st October 2006). INDI 2.3 Required Functions
INDI 2.3.1
(1) Every authorised firm must have at least 1 individual approved to carry on the following functions:
(A) senior executive function;
(B) compliance oversight function;
(C) finance function;
(D) the MLRO function.
(2) Every insurer (other than a QFC captive insurer) must, as well as having at least 1 individual approved to carry on the functions mentioned in subrule (1), have a member of its senior management approved to carry on the risk management function.
Note See CTRL, r 4.4.4 (2).
INDI 2.3.2If more than one individual is appointed to perform any of the Controlled Functions listed in INDI Rule 2.3.1 the Authorised Firm must ensure that the allocation of responsibility for the purposes of CTRL section 3.1 clearly avoids duplication or omission. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 2.3.3
An insurer (other than a QFC captive insurer) conducting Long Term Insurance Business must have at least one individual approved to carry on the Actuarial Function.
INDI 2.3.4
An insurer (other than a QFC captive insurer) conducting General Insurance Business, where:
(A) more than 15 per cent of the Insurer's gross outstanding liabilities are attributable to Contracts of Insurance for General Insurance Business in PINS Category 1; or
(B) more than 20 per cent of the Insurer's gross outstanding liabilities are attributable to Contracts of Insurance for General Insurance Business in PINS Category 4
must have at least one individual approved to carry on the Actuarial Function.
INDI 2.3.4 GuidanceThe purpose of INDI Rules 2.3.3 and 2.3.4 is to ensure all Insurers carrying out Contracts of Insurance where either the Contract of Insurance is in force for more than one year or where a material potion of these Contracts of Insurance include long-tail business, are required to seek actuarial advice. Long-tail business comprises classes of Insurance Business where the claims are typically settled one year or more after the date of the occurrence of the event that gives rise to the claim.
Derived from QFCRA RM01/2006 (as from 1st October 2006). INDI 2.4 Transitional arrangements
Inserted by QFCRA RM/2010-03 (as from 30th April 2010).
INDI 2.4.1 Transitional arrangements — MLRO function
(1) This rule applies if, immediately before its commencement, an individual was approved to exercise the money laundering reporting function for an authorised firm.
(2) The approval is taken, after the commencement of this rule, to be the approval of the individual to exercise the MLRO function for the firm.
INDI 2.4.2 Transitional arrangements — MLRO residency
(1) This rule applies if, immediately before its commencement, a waiver or modification notice was in force under the Financial Services Regulations in relation to rule 2.2.2.
(2) The notice applies, after the commencement of this rule, as if —
(a) it were a notice given in relation to the Anti-Money Laundering and Combating Terrorist Financing Rules 2010, rule 2.3.2 (2) (Eligibility to be MLRO or deputy MLRO); and
(b) any necessary changes were made to the notice to give effect to the waiver or modification given by it.
INDI 3 Approved actuaries
Deleted by QFCRA RM01/2010 (as from 3rd March 2010).
INDI 3.1.1 [Deleted]
INDI 3.1.2 [Deleted]
INDI 3.1.2 Guidance [Deleted]
Deleted by QFCRA RM01/2008 (as from 7th April 2008).
INDI 3.2.1 [Deleted]
INDI 3.3.1 [Deleted]
INDI 3.3.2 [Deleted]
INDI 3.3.2 Guidance [Deleted]
INDI 3.3.3 When application to withdraw registration of approved individual must be made [restructured effective 3rd March 2010]
Restructed by QFCRA RM01/2010 (as from 3rd March 2010) to form new rule INDI 6.3.1.
INDI 3.4 [Deleted]
INDI 3.1.1 Insurer to give notice before removal of approved actuary
(1) An insurer must give the Regulatory Authority reasonable advance notice of at least 2 business days of a proposal to remove an approved actuary for the insurer.
(2) The notice must include the reasons for the removal.
INDI 3.1.2 Notification by insurer if appointment of approved actuary ends
If the appointment of an approved actuary for an insurer ends for any reason, the insurer must tell the Regulatory Authority immediately, but by no later than the second business day after the day the appointment ends —
(a) that the appointment has ended; and
(b) the reason for the appointment ending.
Note For the obligation of the approved actuary to notify the Regulatory Authority if the actuary's appointment ends, see Financial Services Regulations, art 91 (Resignation of auditors and actuaries).
INDI 3.1.3 Insurer must appoint approved actuary if vacancy arises
If at any time there is not an approved actuary for an insurer, the insurer must appoint an approved actuary as soon as practicable, but within 3 months after the day the vacancy arises.
INDI 3.1.4
(1) If an Insurer, which is required to appoint an Approved Actuary under INDI Rule 2.3.3 or 2.3.4, fails to do so within 28 days of a vacancy arising, the Regulatory Authority may appoint one or more actuaries to perform any function corresponding to the actuarial function on the following terms:
(A) the actuary to be remunerated by the Insurer on the basis agreed between the actuary and the Insurer or, in the absence of agreement, on a reasonable basis; and
(B) the actuary to hold office until he resigns or the Insurer appoints another actuary.
(2) An Insurer must comply with and is bound by the terms on which an actuary has been appointed by the Regulatory Authority under subrule (1).
(3) If the Regulatory Authority appoints an actuary under subrule (1), he will not be an Approved Actuary. However, the Insurer is still under an obligation to appoint an Approved Actuary under INDI Rule 2.3.3 or 2.3.4 and will need to seek prior approval of that person (even if the individual it proposes to appoint is the person who has been appointed by the Regulatory Authority under subrule (1)).
INDI 3.1.4 Guidance
1. INDI Rule 3.4.3(1) allows, but does not require, the Regulatory Authority to appoint an actuary if the Insurer has failed to do so within the 28 day period. When it considers whether to use this power, the Regulatory Authority will take into account the likely delay until the Insurer can make an appointment and the urgency of any pending duties of the actuary.
2. The Regulatory Authority will not normally seek to appoint an actuary under INDI Rule 3.4.3(1), if an application under INDI Rule 3.1.1 has been received from the Insurer in relation to a proposed appointment of an Approved Actuary as required under INDI Rule 2.3.3 or 2.3.4 and that application is still being considered.
INDI 4 Principles for training and competency
Note for chapters 4, 4A and 5
Individuals performing controlled functions need to have the appropriate competency elements of skills, knowledge and experience. Individuals having these competency elements strengthen the protection given to clients, customers and stakeholders. Authorised firms need to prudently manage the risks that may arise as a result of individuals performing controlled functions.
INDI 4.1 Authorised Firm's assessment of Individuals [deleted]
The senior management of an authorised firm must ensure that the firm's policies, procedures, systems and controls appropriately and adequately address the training and competency requirements in this chapter, chapter 4A and chapter 5.
An authorised firm must design, deliver and maintain an appropriate ongoing training and competency programme for individuals performing controlled functions for the firm.
An authorised firm must undertake initial and ongoing assessment of each individual's competencies to perform controlled functions.
An authorised firm must ensure that individuals performing controlled functions receive or undertake sufficient training and continuing professional development.
An authorised firm must be able to provide documentary evidence of its compliance with the requirements relating to training and competency of individuals performing controlled functions.
INDI 4.2 Regulatory Authority's assessment of Individuals [deleted]
INDI 4.2.1 [deleted]
INDI 4.2.2 [deleted]
INDI 4.3 Honesty, Integrity and Reputation [deleted]
INDI 4.3.1 [deleted]
INDI 4.4 Competence and Capability [deleted]
INDI 4.4.1 [deleted]
INDI 4.5 Financial Soundness [deleted]
INDI 4.5.1 [deleted]
INDI 4A Training and competency programme
INDI 4A.1.1 Appropriate programme to be delivered etc
(1) An authorised firm must design, deliver and maintain an appropriate ongoing training and competency programme for individuals performing controlled functions for the firm.
(2) The programme—
(a) must be relevant, timely and appropriately structured; and
(b) must ensure that approved individuals are aware, and have an appropriate understanding, of—
(i) their roles, responsibilities and obligations; and
(ii) the firm's processes in so far as they apply to each approved individual's role; and
(iii) any reports that they are required to make; and
(iv) the sources of information for making the reports; and
(c) must include policies, procedures, systems and controls on how the firm is to decide whether individuals are competent to perform controlled functions.
(3) In designing its training and competency programme for approved individuals, the firm must consider the following:
(a) their differing needs, experience, skills and abilities;
(b) their differing roles and levels in the firm;
(c) the degree of supervision over, or independence exercised by, them;
(d) the availability of information needed for them to perform their roles;
(e) the nature, scale and complexity of the firm's business, including—
(i) the products and services offered or provided, and proposed to be offered or provided, by it; and
(ii) changes to those products and services and to the market;
(f) the clients of the firm;
(g) the outcome of reviews of their training and competency;
(h) any analysis showing areas where training needs to be enhanced;
(i) the regulatory system, including any recent, or reasonably expected, changes to it.
Examples for subrule (3)—designing programmes that consider the individual's needs, roles etc
1 training programmes for new approved individuals need to be different to programmes for those who have been approved individuals for some time and are already aware of the firm's policies, processes, systems and controls
2 training programmes for approved individuals performing the customer facing function need to be different to programmes for other approved individuals
3 training programmes for approved individuals performing the customer facing function in relation to securities need to be different to programmes for approved individuals performing the customer facing function in relation to derivatives or contracts of insurance
4 training programmes for approved individuals performing the non-executive governance function should reflect the specific role that each individual performs within the firm (Training obligations for such approved individuals are likely to be less intense than would otherwise be expected for individuals with roles in the day-to-day activities of the firm and might come in the form of the individual's participation and assessment in executive coaching, board retreats and planning days, board peer review as well as through membership of other boards and governing bodies).
(4) Subrule (3) does not limit the matters that the firm may consider.
INDI 4A.1.2 Training must be maintained and reviewed(1) An authorised firm's training and competency programme must
include ongoing training to ensure that approved individuals—
(a) maintain their competencies; and
(b) are kept up to date with developments relating to their
controlled functions; and
(c) are trained on any changes to the firm's policies, procedures,
(2) A firm must, at regular and appropriate intervals, review and
(a) its training and competency programme and training and
competency document for quality and effectiveness; and
(b) the training needs of approved individuals to ensure that their
INDI 4A.1.3 Training and competency document
(1) An authorised firm must prepare a document (training and competency document) describing its training and competency programme.
(2) A firm's training and competency document must include—
(a) the requirements, characteristics and role of each of the following controlled functions:
(i) a controlled function for which the firm is required to have at least 1 individual approved under section 2.3 (Required functions);
(ii) any other controlled function for which the firm has an individual performing the function; and
(b) how the firm is to satisfy itself that each individual performing a controlled function has, and continues to have, the competencies required to perform the function; and
(c) the continuing professional development to be provided for approved individuals and the review and evaluation of their training needs; and
Note See rule 5.1.3 (Continuing professional development for approved individuals).
(d) how the firm is to ensure that it complies, and can demonstrate its compliance, with its training and competency programme; and
(e) the review and evaluation of its training and competency programme and training and competency document, including who is to conduct the review and evaluation and when they are to be conducted; and
(f) the revision of its training and competency programme and training and competency document, including who is to approve any revision.
(3) To remove any doubt, revision includes amendment and replacement.
INDI 4A.1.4 Firm must comply with its training and competency programme
(1) An authorised firm must comply with the requirements and procedures in its training and competency programme and training and competency document as revised from time to time.
(2) The individual approved to perform the compliance oversight function for an authorised firm must—
(a) monitor on an ongoing basis the firm's compliance with its training and competency programme and training and competency document; and
(b) report to the firm's governing body at least once a year about the firm's compliance with its training and competency programme and training and competency document.
INDI 4A.2 Assessment of individuals for controlled functionsNote for part 4A.2
Principle 3 (see rule 4.1.3) requires an authorised firm to undertake initial and
ongoing assessment of each individual's competencies to perform controlled
INDI 4A.2.1 Initial competency and fitness assessments by firms
Before making an application to the Regulatory Authority for an individual to be approved to perform 1 or more controlled functions, an authorised firm must be satisfied, on reasonable grounds after making appropriate inquiries, that the individual—
(a) has the competencies required to perform each function; and
(b) is a fit and proper person to perform each function; and
(c) satisfies any additional requirements under these or any other Rules for each function.
Note 1 Under FSR, article 41(1) (Approval of persons performing controlled functions), an authorised firm must ensure that no individual performs a controlled function for it unless the individual is approved by the Regulatory Authority as an approved individual.
Note 2 Section 2.2 of these rules sets out additional requirements for particular controlled functions.
Note 3 This rule is subject to rule 4A.4.1 (Application—individuals likely to acquire competencies for customer facing function within 12 months).
INDI 4A.2.2 How competency assessment made by firms
(1) In deciding whether it is satisfied that an individual has the competencies required to perform a controlled function, an authorised firm must have regard to—
(a) the controlled function; and
(b) the nature, scale and complexity of the firm's business, including—
(ii) changes to those products and services and to the market; and
(c) the clients of the firm; and
(d) the regulatory system, including any recent, or reasonably expected, changes to it; and
(e) the qualifications that may be required for the function.
Note For competencies for controlled functions, see rule 4A.2.3 and the guidance following that rule.
(2) In deciding whether a qualification that is not specified in schedule 1 or schedule 2 nevertheless meets the knowledge element for the role to be performed by an individual, an authorised firm must have regard to qualifications recognised as appropriate for the role by another regulator (for example, the Financial Services Authority (UK), the Australian Securities and Investments Commission, the New Zealand Securities Commission, the Financial Industry Regulatory Authority (US), the Securities and Futures Commission (Hong Kong) or the Monetary Authority of Singapore).
Note In the United Kingdom, many of the recognised qualifications for various functions related to financial services are to be found in the Training and Competence Sourcebook published by the Financial Services Authority.
(3) This rule does not limit the matters to which the authorised firm may have regard in making its decision.
INDI 4A.2.3 Competencies
(1) The competencies for a controlled function are the combination of the elements of skills, knowledge and experience that make an individual competent to perform the function.
(2) Schedule 1 sets out a non-exhaustive list of the competencies that individuals are expected to have for effective performance of controlled functions (other than the customer facing function).
(3) Schedule 2 sets out a non-exhaustive list of the competencies that individuals are expected to have for effective performance of the customer facing function.
(4) The extent of the application of the competencies in schedule 1 and schedule 2 in relation to a particular individual and a particular firm depends on the nature and complexity of the individual's role in the firm and the regulated activity or activities to be conducted by the individual.
(5) As a general rule, individuals who will be performing the following controlled functions must have the regulatory or technical qualifications set out as knowledge competencies in schedule 1 and schedule 2 before they can be approved:
(a) compliance oversight function;
(b) risk management function;
(d) MLRO function;
(e) actuarial function;
(f) customer facing function with retail customers.
Examples for subrule (4)
1 An individual seeking to be approved to perform the compliance oversight function for a firm engaged in limited regulated activities need not necessarily have all the skills set out in rules S4.1 to S4.13 of Schedule 1. In contrast, an approved individual performing the compliance oversight function for a firm engaged in complex regulated activities is expected to have all or most of those skills.
2 An individual seeking approval to perform solely the role of insurance adviser performing the customer facing function in relation to motor vehicle policies need only be assessed for skills, knowledge and experience required for that limited role in the firm.
Guidance for rule 4A.2.3
1 The 3 competency elements against which an individual is to be assessed as competent or not are the individual's—
(a) skills (what the individual ought to be able to do); and
(b) knowledge (what the individual ought to know or to have by way of qualifications); and
(c) experience (what the individual has previously done, if anything).
2 The 3 competency elements are to be used in making assessments under rule 4A.2.2 (How competency assessment made by firms), rule 4A.3.3 (How competency decided by Regulatory Authority), rule 4A.3.5 (Eligibility to continue to be approved) and rule 4A.4.2 (Conditional approval—individuals likely to acquire competencies for customer facing function within 12 months).
3 An authorised firm and the Regulatory Authority must decide (taking into account the circumstances of each case, the matters in rule 4A.2.2 and rule 4A.3.3 and the role of the individual) whether it is satisfied that the individual has the competencies required to perform the controlled function for the firm.
4 Under subrule 4A.2.3(5), there are certain knowledge competencies that an individual must have before the individual can be approved by the Regulatory Authority (for example, regulatory or technical qualifications required for individuals who will be dealing with retail customers).
5 The following are indicative examples of appropriate levels of experience that may be used by a firm undertaking a competency assessment under rule 4A.2.2:
• for a junior role in the firm—up to 2 years experience performing the function or a similar role
• for a mid level role in the firm—more than 2 years and up to 10 years experience
• for a senior role in the firm—more than 10 years experience.
INDI 4A.2.4 How fitness assessment made by firms(1) In deciding whether it is satisfied that an individual is a fit and
proper person to perform a controlled function, an authorised firm
(a) the individual's honesty, integrity and reputation; and
(b) the individual's financial soundness.
(2) For paragraph (1) (a), the authorised firm must take into account the
following matters about the individual's honesty, integrity and
(a) any past, ongoing or pending legal proceedings, whether civil
or criminal, relating to or involving the individual;
(b) any investigation undertaken, disciplinary action taken, or
sanctions imposed, in relation to or on the individual by a
court, tribunal, regulatory or governmental agency, body or
authority, exchange, clearing house, self-regulatory body or
other professional body;
(c) any complaint against the individual relating to, or any
contravention by or involving the individual of, any financial
services legislation (including any regulations, rules,
statements of principle or codes of practice made by an
exchange, clearing house, self-regulatory body or other
professional body);
(d) any complaint made about the individual's standard of conduct
in relation to activities subject to regulation inside or outside
the QFC;
(e) the individual's involvement with any business that—
(i) was wound up or put into liquidation, placed in
receivership or administration, ceased trading, negotiated
a settlement with creditors, or became insolvent—
(A) while the individual was involved with the business;
(B) within 1 year after that involvement ended; or
(ii) had any approval, authority, licence, registration or other
permission to conduct business removed, restricted or
(iii) has been refused any approval, authority, licence,
registration or other permission to conduct business; or
(iv) has been expelled by any regulatory or governmental
agency, body or authority; or
(v) has been investigated, criticised, disciplined, censured or
suspended by any regulator, professional body or
tribunal, whether publicly or privately;
(f) whether the individual has been dismissed, or asked to resign
and has resigned, from a position of trust or fiduciary
(g) the effect that the individual's reputation may have on the
authorised firm and the QFC;
(h) whether the individual has been candid and truthful in dealing
(3) For paragraph (1) (b), the authorised firm must take into account the
following matters about the individual's financial soundness:
(a) whether the individual is able to pay debts as they fall due;
(b) any arrangement made by the individual with creditors;
(c) whether the individual has filed for bankruptcy, been served
with any bankruptcy petition or been subject to any bankruptcy
(d) whether the individual has had assets seized, confiscated or
(4) This rule does not limit the matters the authorised firm may take
into account in having regard to the individual's honesty, integrity,
reputation and financial soundness.
INDI 4A.3.1 Application—individuals with required competencies
If an authorised firm is satisfied under rule 4A.2.1 (Initial competency and fitness assessments by firms) that the individual has the competencies required to perform 1 or more controlled functions, the firm may apply to the Regulatory Authority for approval of the individual to perform the function or functions for the firm.
INDI 4A.3.2 Eligibility for approval of individuals—general
An individual is eligible to be approved by the Regulatory Authority to perform 1 or more controlled functions for an authorised firm only if the firm demonstrates to the authority's satisfaction that the individual—
Note 1 Section 2.2 of these rules sets out additional requirements for particular controlled functions.
Note 2 For conditional approval of individuals (to perform a customer facing function) who are not eligible under this rule, see Part 4A.4.
INDI 4A.3.3 How competency decided by Regulatory Authority
In deciding whether it is satisfied than an individual has the competencies required to perform a controlled function for an authorised firm, the Regulatory Authority may have regard to matters that the authority considers relevant, including the matters in subrule 4A.2.2(1).
INDI 4A.3.4 How decision on fitness and propriety made
(1) In deciding whether it is satisfied that an individual is a fit and proper person to be approved to perform a controlled function for an authorised firm, the Regulatory Authority may have regard to the following:
(a) the individual's honesty, integrity and reputation;
(b) the individual's financial soundness;
(2) For paragraph (1) (a), the Regulatory Authority may take into account matters about the individual's honesty, integrity and reputation that the authority considers relevant, including the matters in subrule 4A.2.4(2).
(3) For paragraph (1) (b), the Regulatory Authority may take into account matters about the individual's financial soundness that the authority considers relevant, including the matters in subrule 4A.2.4(3).
INDI 4A.3.5 Eligibility to continue to be approved
An approved individual is eligible to continue to be approved by the Regulatory Authority to perform 1 or more controlled functions for an authorised firm only if the firm can demonstrate on an ongoing basis to the authority's satisfaction that—
(a) the individual has the competencies required to perform each function; and
(b) the individual is a fit and proper person to perform each function; and
(c) the individual satisfies any additional requirements under these or any other Rules for each function.
INDI 4A.4.1 Application—individuals likely to acquire competencies for customer facing function within 12 months
Despite rule 4A.2.1 (Initial competency and fitness assessments by firms), an authorised firm may apply to the Regulatory Authority for approval of an individual to perform the customer facing function even if the individual does not have the competencies required for that function, if—
(a) the firm is satisfied that, if approved, the individual would acquire the competencies within 12 months after the conditional approval; and
(b) the firm can ensure that, until the individual has acquired the competencies, the individual will be appropriately supervised while performing the function.
INDI 4A.4.2 Conditional approval—individuals likely to acquire competencies for customer facing function within 12 months
(1) An individual for whom an authorised firm has made an application under rule 4A.4.1 is eligible to be approved by the Regulatory Authority to perform the customer facing function for the firm only if—
(a) the firm has stated in the application that it is satisfied that—
(i) if approved, the individual would acquire the competencies required to perform the function within 12 months after the conditional approval (the 12 month period); and
(ii) until the individual has acquired the competencies, it can ensure that the individual will be appropriately supervised while performing the function; and
(b) the firm demonstrates to the authority's satisfaction that the individual—
(i) is a fit and proper person to perform the customer facing function; and
(ii) satisfies any additional requirements under these or any other Rules for the function.
(2) If the Regulatory Authority decides to approve the individual to perform the customer facing function for the authorised firm, the approval (the conditional approval) is subject to the condition that the individual will cease to be approved to perform the customer facing function if—
(a) the individual ceases to be a fit and proper person; or
(b) the firm is unable to appropriately supervise the individual; or
(c) the individual ceases to satisfy any additional requirements prescribed under these or any other Rules for the function; or
(d) the 12 month period has ended, unless the firm notifies the Regulatory Authority under subrule (3) that it has made a decision about the individual.
(3) If an individual is given a conditional approval and the authorised firm decides before the end of the 12 month period that it is satisfied that the individual has acquired the competencies required to perform the customer facing function, the firm must immediately notify the Regulatory Authority about its decision.
Note See rule 4A.2.2 (How competency assessment made by firms).
(4) A notification under subrule (3)—
(a) must state the reasons for the decision and the matters to which the authorised firm had regard, and took into account, in making the decision; and
(b) must be accompanied by documentary evidence (if any) in support of the decision.
Note Under the General Rules 2005, rule 5.1.1, communications to the Regulatory Authority must generally be in writing, unless the authority requires or permits the communication to be made to it in another way (for example, using approved forms (see rule 5.3.1) or the electronic submission system established by the authority (see rule 5.4.1)).
(5) If the Regulatory Authority receives notification under subrule (3), the authority must, within 20 business days after it received the notification, give written notice to the firm—
(i) the authority agrees with the decision of the firm; and
(ii) the conditions attached to the individual's conditional approval cease to have effect; and
(iii) the individual continues to be an approved individual; or
(b) that the authority is not satisfied that the individual has the competencies required to perform the function and the conditional approval of the individual continues to have effect in accordance with its terms for the remainder of the 12 month period for which it was granted; or
(c) that the firm give any additional statement, explanation, document or further information that the authority considers necessary or desirable to enable it give the notice under paragraph (a) or (b).
Note For competencies for the customer facing function, see schedule 2. See also rule 4A.2.3 and guidance after that rule.
(6) A notice under subrule (5) (b) must include the reasons why the Regulatory Authority is not satisfied that the individual has the competencies required to perform the function.
(7) Nothing in this rule prevents a firm from—
(a) giving, during the 12 month period, more than 1 notification under subrule (3) in relation to an individual; or
(b) making another application on behalf of an individual who has been given a conditional approval if the individual fails to acquire the competencies required to perform the customer facing function within the 12 month period.
Note Under FSR, article 46 (1) (d), the Regulatory Authority may also exercise other powers or steps if an approved individual, or the authorised firm in respect of which the approved individual is approved, breaches a condition, restriction or requirement applicable to the approval.
INDI 4A.4.3 What constitures appropriate supervision?
(1) Subject to subrule (2), an individual performing a controlled function is appropriately supervised if—
(a) the individual is supervised by another individual (the supervisor)—
(i) who is approved under Part 4A.3 to perform the controlled function for the firm; or
(ii) who is approved under Part 4A.3 to perform the compliance oversight function for the firm; and
(b) the firm is satisfied that the supervisor has the ability to supervise, train, coach and mentor the individual; and
(c) the supervisor considers the individual's needs, experience, skills, abilities, role and level in the firm when determining the degree of supervision required by the individual.
(2) An individual approved to perform the customer facing function who is conducting the relevant regulated activity with a customer is appropriately supervised only if—
(i) who is approved under Part 4A.3 to perform the customer facing function for the firm; and
(ii) who has the same, or broader, scope of approval; and
Examples of variations in degree of supervision of individuals conditionally approved under rule 4A.4.2
1 An individual who has just obtained regulatory or technical qualifications but does not have experience appropriate for advising on investments will require intensive supervision when performing customer facing functions.
2 An individual who is working towards obtaining regulatory or technical qualifications and has experience appropriate for advising on investments will need a lower degree of supervision compared to the individual described in example 1.
INDI 5 Training and other ongoing obligations relating to controlled functions
1 Principle 4 (see rule 4.1.4) requires an authorised firm to ensure that individuals performing controlled functions receive or undertake sufficient training and continuing professional development.
2 Principle 5 (see rule 4.1.5) requires an authorised firm to be able to provide documentary evidence of its compliance with the requirements relating to training and competency of individuals performing controlled functions.
INDI 5.1 Suitability and Competence [deleted]
INDI 5.1.5 [deleted]
(1) An authorised firm must, from time to time in accordance with its training and competency document, ensure that each approved individual for the firm—
(a) continues to have the competencies required to perform the controlled function or functions that the individual is approved to perform; and
(b) continues to be a fit and proper person to perform each function.
(2) The following rules apply to an authorised firm in deciding whether an individual continues to have the competencies, and continues to be a fit and proper person, to perform each function:
• rule 4A.2.2 (How competency assessment made by firms)
• rule 4A.2.4 (How fitness assessment made by firms).
(1) An authorised firm must, from time to time in accordance with its training and competency document, assess each approved individual's training and development needs.
(2) The interval between assessments of the individual's training and development needs must not be longer than 12 months.
An authorised firm must ensure that each approved individual for the firm receives sufficient continuing professional development appropriate to the nature and complexity of the individual's role to ensure that the individual continues to have the competencies required to perform the controlled function or functions for which the individual is approved.
Examples of continuing professional development
2 industry literature review
4 obtaining professional qualifications
5 technical training for roles that are highly technical or that involve constant changes in legislation or regulatory practice
Note The authorised firm's training and competency document must state its policies and procedures about continuing professional development (see rule 4A.1.3 (2) (c)).
(1) An authorised firm must make the records necessary—
(a) to enable the firm to comply with chapter 4, chapter 4A and this chapter; and
(b) to demonstrate, at all times, that it has complied with chapter 4, chapter 4A and this chapter.
(2) Without limiting subrule (1), the authorised firm must make a record of how it made each decision about an individual, including, for example—
(a) the inquiries that it made before making the decision, the dates it made the inquiries and the results of those inquiries; and
(b) the matters to which it had regard and took into account in making the decision; and
(c) the provisions of Rules and guidance that it considered or complied with in making the decision, and, if appropriate, how it complied with the Rules; and
(d) the decision, the date it was made and the reasons for the decision.
(3) Records made by the authorised firm must be kept by the firm for at least 6 years after the day they are made.
(4) However, records made for subrule (2) about an individual who is (or has been) an approved individual must be kept by the authorised firm for at least 6 years after the day the individual ceases (or ceased) to be an approved individual.
INDI 5.2 Training and Supervision [deleted]
Continuing Competence [deleted]
INDI 5.2.1 [deleted]
INDI 5.2.2 [deleted]
INDI 5.2.3 [deleted]
INDI 5.3 Record Keeping [deleted]
INDI 5.3.1 [deleted]
INDI 6 Performance of Controlled Functions
INDI 6.1.1An individual may carry on Controlled Functions for more than one Authorised Firm provided that: (A) each such Authorised Firm confirms to the Regulatory Authority: (i) that it is aware of the Controlled Functions which that individual carries out for any other Authorised Firm; and (ii) that it is satisfied that no conflict of interest will arise from the performance by that individual of those Controlled Functions for such other Authorised Firm; and (B) the Regulatory Authority is satisfied that no such conflicts of interest will arise. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 6.1.2An individual may carry on more than one Controlled Function for an Authorised Firm provided that the Authorised Firm is satisfied that the performance of such Controlled Functions does not give rise to any internal or external conflicts of interest and is appropriate having regard to the nature, scale and complexity of the business carried on by that Authorised Firm. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 6.1.2 GuidanceAn individual registered for the Customer Facing Function should not also be registered for the Compliance Oversight Function or any similar control function. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 6.2 Temporary Cover
INDI 6.2.1
An Authorised Firm which is a Non-Local Firm or which is part of wider group of regulated entities, may permit an individual who is an Employee of the Authorised Firm or the Authorised Firm's Group to carry out a Customer Facing Function during one or more occasional visits to the QFC, without requiring such an individual to have Approved Individual status, provided:
(a) the visits do not total more than 45 days in any consecutive 12 months;
(B) the individual is appropriately supervised by the Authorised Firm;
(C) the individual is approved, authorised, licensed or otherwise registered by an Overseas Regulator to undertake an equivalent role for the Authorised Firm or Group;
(d) the authorised firm is satisfied that the individual has the skills and experience, and is a fit and proper person, to perform the customer facing function; and
(E) prior notification is given to the Regulatory Authority.
INDI 6.2.2Where an individual is appointed under INDI Rule 6.2.1 the Regulatory Authority may exercise any powers as it would otherwise be entitled to do, as if the individual held Approved Individual status. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 6.3 Individuals ceasing to exercise controlled functions
Inserted by QFCRA RM01/2010 (as from 3rd March 2010).
INDI 6.3.1
(1) This rule applies if an authorised firm becomes aware that, for any reason, an individual who is an approved individual for the firm is to cease to exercise, or has ceased to exercise, a controlled function for the firm.
(2) The authorised firm must make an application to withdraw the individual's registration to exercise the controlled function for the firm.
(3) The authorised firm must make the application to the Regulatory Authority —
(a) at least 10 business days before the day the individual is to cease to exercise the controlled function for the firm; or
(b) if it is not practicable to make the application to the authority in accordance with paragraph (a) — immediately after the firm becomes aware that the individual is to cease to exercise, or has ceased to exercise, the controlled function, but within 2 business days.
Examples — meaning of 'within 2 business days'
1 If, on a business day, the authorised firm becomes aware that the individual will cease to exercise the controlled function, the firm must make the application immediately, but by no later than the next business day.
2 If, on a day that is not a business day, the authorised firm becomes aware that the individual has ceased to exercise the controlled function, the firm must make the application immediately, but by no later than 2 business days after that day.
INDI 7 Principles
INDI 7.1.1 AI Principle 1 — IntegrityAn Approved Individual must act with integrity at all times in the carrying out of Controlled Functions. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 7.1.2 AI Principle 2 — Due Skill, Care and DiligenceAn Approved Individual must act with due skill, care and diligence in the carrying out of Controlled Functions. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 7.1.3 AI Principle 3 — Market ConductAn Approved Individual must observe appropriate standards of market conduct in the carrying out of Controlled Functions. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 7.1.4 AI Principle 4 — Relations with the RegulatorAn Approved Individual must deal with the Regulatory Authority in an open and cooperative manner and disclose appropriately to the Regulatory Authority any information of which the Regulatory Authority would reasonably expect notice. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 7.1.5 AI Principle 5 — Management and ComplianceAn Approved Individual who is a Senior Manager must give appropriate priority to his management responsibilities and ensure that the business of the Authorised Firm for which he is responsible is effectively supervised and controlled and complies with the relevant requirements of the Regulatory System. Derived from QFCRA RM03/2005 (as from 13th October 2005). INDI 8 Transitional provisions (Versions from January 1 2012)
INDI 8.1.1 Approved individuals to remain approved (Versions from January 1, 2012)
A person approved to perform a controlled function before 1 January 2012 whose approval is in effect continues to be an approved individual to perform that controlled function on and after that date.
Note An approved individual before 1 January 2012 continues to be an approved individual and need not re-apply and be re-assessed as competent under the new training and competency rules. However, the individual will be subject to new requirements such as on-going assessment (see rule 4A.3.5) and continuing professional development (see rule 5.1.3).
INDI 8.1.2 Applications pending on 31 December 2011 (Versions from January 1, 2012)
(1) An application for approval to perform a controlled function that was filed before, but not yet decided by, 1 January 2012 is to be decided in accordance with the pre-1 January rules.
pre-1 January rules means the provisions on training and competency in chapter 4 (Fitness and Propriety), chapter 5 (Competency, Training and Supervision) and Appendix 1 (Guidance on Fitness and Propriety of Approved Individuals) immediately before 1 January 2012.
INDI 8 Miscellaneous [Deleted]
INDI 8.1.1 Approved frms to be used [Deleted]
INDI 8.1.2 Completion of forms [Deleted]
INDI Schedule 1 Competencies for controlled functions other than customer facing function
(r 4A.2.3(2))
Note 1 The requirements in this schedule are in addition to other requirements prescribed under any other Rules (see, for example, INDI, section 2.2 for senior executive function, compliance oversight function and actuarial function; CTRL, section 4.3 for compliance oversight function, CTRL, section 4.4 for risk management function and AML/CFTR, rule 2.3.2 for MLRO function).
Note 2 The competencies in this schedule are based on the National Occupational Standards (the FSP Standards) prepared by the Financial Skills Partnership (UK). The FSP Standards are used in these rules with, and subject to, the permission of FSP. Copyright of the FSP Standards is vested in FSP and their use or reproduction by any person for any purpose without the written consent of FSP is prohibited.
Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.
Part S1 Senior executive function
competenciesNote for part S1
The competencies that individuals are expected to have under this part are not
exhaustive, and the extent of their application depends on the nature and
complexity of the individual's role in the day-to-day activities of the firm (see
rule 4A.2.3).
Division S1.1 SkillsS1.1 Assume, alone or with others, overall responsibility for the whole of
S1.2 Exercise critical judgement
S1.3 Plan, lead and implement change
S1.4 Develop the senior management team
S1.5 Manage risk
S1.6 Demonstrate and encourage strategic thinking
S1.7 Exhibit organisational leadership
S1.8 Undertake in an effective manner the fiduciary responsibilities of a
member of the governing body of the firm
Division S1.2 KnowledgeS1.21 Level of knowledge appropriate for role (which may be
demonstrated by having appropriate qualifications)
S1.22 Good knowledge of the principles of sound and effective corporate
Division S1.3 Experience and other elementsS1.31 Appropriate level of experience and seniority for the role
Part S2 Executive governance function competenciesNote for part S2
complexity of the individual’s role in the day-to-day activities of the firm (see
Division S2.1 SkillsS2.1 Act as a member of the governing body of the firm with executive
responsibility for at least some of the day-to-day direction of its
S2.2 Exercise critical judgement
S2.3 Plan, lead and implement change
S2.4 Develop staff
S2.5 Manage risk
S2.6 Demonstrate and encourage strategic thinking
S2.7 Exhibit organisational leadership
S2.8 Promote compliance culture of the firm
S2.9 Undertake in an effective manner the fiduciary responsibilities of a
Division S2.2 Knowledge
S2.21 Level of knowledge appropriate for role (which may be demonstrated by having appropriate qualifications)
S2.22 Good knowledge of the principles of sound and effective corporate governance
Division S2.3 Experience and other elementsS2.31 Appropriate level of experience and seniority for the role
Part S3 Non-executive governancefunction competencies
Notes for part S3
1. The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on the nature and complexity of the individual's role in the firm (see rule 4A.2.3).
2. Moreover, the competencies that an individual who is to perform the non-executive governance function is expected to have under this part should reflect the specific role that the individual will perform within the firm. As such, competency assessments for the individual are likely to be less frequent than would otherwise be expected for individuals with roles in the day-to-day activities of the firm. For example, a competency assessment may be met through the individual's participation and assessment in executive coaching, board retreats and planning days, board peer review as well as through membership of other boards and governing bodies.
Division S3.1 SkillsS3.1 Act as a member of the governing body of the firm, but without
responsibility for the day-to-day direction of its affairs
S3.2 Perform the role in a way that demonstrates independence within the
governing body of the firm
S3.3 Undertake in an effective manner the fiduciary responsibilities of a
Division S3.2 KnowledgeS3.21 Level of knowledge appropriate for role (which may be
S3.22 Good knowledge of the principles of sound and effective corporate
Division S3.3 Experience and other elementsS3.31 Appropriate level of experience and seniority for the role
Part S4 Compliance oversight function
competenciesNote for part S4
Division S4.1 SkillsS4.1 Research the firm’s organisation and its requirements to help inform
S4.2 Develop, communicate and implement a compliance policy for the
S4.3 Develop and monitor compliance controls in the firm
S4.4 Keep up to date with regulatory developments
S4.5 Support the staff in the firm to maintain compliance and assist the
governing body in developing the compliance culture of the firm
S4.6 Write and present compliance reports
S4.7 Consider and advise on the regulatory implications of new business
S4.8 Plan and deliver compliance training
S4.9 Maintain an effective relationship with relevant external bodies and
respond to requests on consultations
S4.10 Deal with complaints regarding non-compliance
S4.11 Identify, investigate and resolve non-compliant activity within the
S4.12 Inform regulatory bodies of breaches in rules and regulations
S4.13 Develop and monitor the firm’s compliance with its training and
competency programme and training and competency document.
Division S4.2 KnowledgeS4.21 Unless the firm demonstrates to the satisfaction of the Regulatory
Authority that the individual does not need the CISI Regulatory
qualification (or its equivalent) to perform the role, the individual
(a) the CISI Regulatory qualification; or
(b) any other qualification that the Regulatory Authority is
satisfied (on the basis of evidence produced by the firm if the
Regulatory Authority so requires) is at least equivalent to the
CISI Regulatory qualification.
S4.22 Unless in a particular case the Regulatory Authority requires a
qualification that is higher than certificate level, the individual must
(a) a recognised compliance oversight function professional
qualification that is at certificate level; or
(b) any other qualification that the Regulatory Authority is satisfied
(on the basis of evidence produced by the firm if the
Regulatory Authority so requires) is appropriate for the role.
Note In satisfying itself for the purposes of this rule, the Regulatory Authority
may have regard to qualifications recognised as appropriate for the role
by another regulator (for example, the Financial Services Authority
(UK), the Australian Securities and Investments Commission, the New
Zealand Securities Commission, the Financial Industry Regulatory
Authority (US), the Securities and Futures Commission (Hong Kong) or
the Monetary Authority of Singapore). Such qualifications may include
legal, accounting, audit, risk and other specialised professional
Division S4.3 Experience and other elementsS4.31 Appropriate level of experience and seniority for the role
Part S5 Risk management function
competenciesNote for part S5
Division S5.1 SkillsS5.1 Research the firm’s organisation and its requirements to help inform
S5.2 Establish risk strategy and policy for the firm
S5.3 Identify, assess and report risk management information to senior
S5.4 Identify available resources to manage risk for the firm
S5.5 Facilitate risk action planning for the firm
S5.6 Facilitate business continuity planning and disaster recovery for the
S5.7 Develop and maintain external third party relationships relevant to
risk management in the firm
S5.8 Develop and maintain effective risk management communication
S5.9 Monitor and evaluate the effectiveness of risk management controls
Division S5.2 KnowledgeS5.21 The individual must have—
(a) a recognised risk management function professional
Division S5.3 Experience and other elementsS5.31 Appropriate level of experience and seniority for the role
Part S6 Finance function competencies
Note for part S6
The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on the nature and complexity of the individual's role in the day-to-day activities of the firm (see rule 4A.2.3).
Division S6.1 SkillsS6.1 Work effectively in or with accountancy and finance to ensure that
the firm complies with the Regulatory Authority’s prudential
S6.2 Display high standards of professional ethics in accountancy and
S6.3 Ensure that the firm keeps accounting records, financial accounts
and statements and auditors’ reports to the standards, and for the
periods, required
S6.4 Ensure that the firm has its accounts and financial statements
examined, reported, audited and filed in a timely manner and in
accordance with applicable standards
S6.5 Review accounting systems
S6.6 Implement external audit procedures
Division S6.2 KnowledgeS6.21 The individual must have—
(i) a recognised finance function professional qualification;
(ii) any other qualification that the Regulatory Authority is
satisfied (on the basis of evidence produced by the firm if
the Regulatory Authority so requires) is appropriate for
the role; and
(b) membership of a finance function professional body
accounting, audit, risk and other specialised professional qualifications.
Division S6.3 Experience and other elementsS6.31 Appropriate level of experience and seniority for the role
Part S7 MLRO function competenciesNote for part S7
Division S7.1 SkillsS7.1 Gather and disseminate information about AML/CFT requirements
S7.2 Identify the implications of AML/CFT measures for the business
conducted by the firm
S7.3 Assess and mitigate the money laundering and terrorist financing
risks relevant to the firm
S7.4 Identify improvements to the implementation of AML/CFT
measures in the firm
S7.5 Design an AML/CFT programme for the firm
S7.6 Communicate and implement the firm’s AML/CFT policy
S7.7 Assist in developing the compliance culture of the firm
S7.8 Design and oversee procedural controls to monitor money
laundering and terrorist financing risks in the firm
S7.9 Report progress in securing AML/CFT outcomes for the firm
S7.10 Assist senior management in ensuring their staff comply with
S7.11 Develop and maintain AML/CFT records for the firm (including
documentary evidence of compliance, records for customers and
transactions, and reporting and training records)
S7.12 Advise and guide staff on AML/CFT
S7.13 Conduct a business risk assessment
S7.14 Plan and deliver AML/CFT training for the firm
S7.15 Respond to requests to contribute to consultations
S7.16 Handle requests for financial information from relevant authorities
S7.17 Design and monitor an internal reporting system for suspicious
S7.18 Identify, investigate and resolve non-compliant activity within the
S7.19 Report suspicious financial activity to relevant authorities
Division S7.2 KnowledgeS7.21 Unless the firm demonstrates to the satisfaction of the Regulatory
S7.22 Unless in a particular case the Regulatory Authority requires a
(a) a recognised MLRO function professional qualification that is
at certificate level; or
Division S7.3 Experience and other elementsS7.31 Appropriate level of experience and seniority for the role
Part S8 Senior management function
competenciesNote for part S8
rule 4A.2.3). Such qualifications may include legal, accounting, audit, risk and
other specialised professional qualifications.
Division S8.1 SkillsS8.1 Manage and supervise, alone or with others, 1 or more elements of
the firm’s business relating to its regulated activities (other than as a
function in parts S1 to S7)
Division S8.2 KnowledgeS8.21 Level of knowledge appropriate for role (which may be
Division S8.3 Experience and other elementsS8.31 Appropriate level of experience and seniority for the role
Part S9 Actuarial function competenciesNote for part S9
Division S9.1 Skills
S9.1 Assume responsibility for monitoring, advising, investigating and reporting on risks facing a firm that is an insurer that materially affect the firm's ability to meet policyholder liabilities and capital requirements
Division S9.2 KnowledgeS9.21 The individual must have a recognised actuarial function
professional qualification and membership of an actuarial
Division S9.3 Experience and other elementsS9.31 At least 5 years experience as an actuary to an insurer that is
sufficiently recent to ensure familiarity with current issues in the
INDI Schedule 2 Competencies for customer facing function(r 4A.2.3(3))
Note 1 The requirements in this schedule are in addition to other requirements prescribed
under any other Rules.
Note 2 The competencies in this schedule are based on the National Occupational
Standards (the FSP Standards) prepared by the Financial Skills Partnership (UK).
The FSP Standards are used in these rules with, and subject to, the permission of
FSP. Copyright of the FSP Standards is vested in FSP and their use or reproduction
by any person for any purpose without the written consent of FSP is prohibited.
Part S1 Customer facing function competencies—general insurance and pure protection contractsExamples of roles performing this function
1 insurance adviser
3 insurance underwriter
Note for part S1
exhaustive, and the extent of their application depends on—
(a) the nature and complexity of the individual’s role in the day-to-day
activities of the firm; and
(b) the regulated activity or activities to be conducted by the individual
(see rule 4A.2.3).
Division S1.1 Skills
S1.1 Identify the customers' insurance needs for general insurance business
S1.2 Gather and validate financial information
S1.3 Analyse customers' financial situation
S1.4 Research and select appropriate insurance solutions to inform recommendations
S1.5 Advise on suitable insurance solutions and agree the next steps
S1.6 Implement insurance solutions
S1.7 Agree insurance policies with customers to enable them to be appropriately insured
S1.8 Process insurance applications
S1.9 Assist customers with claims
S1.10 Evaluate insurance products and services
S1.11 Process insurance business as an intermediary
S1.12 Process insurance renewals as an intermediary
S1.13 Process mid-term insurance amendments
S1.14 Evaluate risk and advise other insurance intermediaries
S1.15 Process insurance policy documentation
S1.16 Underwrite risks
S1.17 Prepare insurance policy documentation for business
S1.18 Process insurance policy alterations
S1.19 Process insurance renewals
S1.20 Review underwriting decisions to accept risks
S1.21 Underwrite policy alterations
S1.22 Deal with requests to cancel insurance products or services
Division S1.2 Knowledge
Subdivision S1.2.A Retail customersS1.31 Unless the firm demonstrates to the satisfaction of the Regulatory
S1.32 The individual must have—
(a) the CII Award in General Insurance; or
Note In satisfying itself for the purposes of rule S1.31 and S1.32, the
Regulatory Authority may have regard to qualifications recognised as
appropriate for the role by another regulator (for example, the Financial
Services Authority (UK), the Australian Securities and Investments
Commission, the New Zealand Securities Commission, the Financial
Industry Regulatory Authority (US), the Securities and Futures
Commission (Hong Kong) or the Monetary Authority of Singapore).
Such qualifications may include legal, accounting, audit, risk and other
specialised professional qualifications.
Subdivision S1.2.B Business or commercial customersS1.35 Level of knowledge appropriate for role (which may be
Division S1.3 Experience and other elementsS1.41 Experience appropriate for the role (unless the individual is being
assessed against this element for the purposes of a conditional
Example of exception to rule S1.41
An individual who has recently obtained the CISI Regulatory qualification and
CII Award in General Insurance may be conditionally approved under rule 4A.4.2
to exercise (under appropriate supervision) the customer facing function with
retail customers despite the lack of experience in the customer facing function for
general insurance if the individual will be likely to obtain the appropriate
experience competency within 12 months.
Part S2 Customer facing function
competencies—long term
insurance contracts and units in
collective investment schemesExamples of roles performing this function
2 investment consultant
3 private client investment adviser
4 client service representative or relationship manager
5 institutional sales
Notes for part S2
1 The roles performing this function typically involve the regulated activities
of advising on investments and arranging deals in investments.
2 The competencies that individuals are expected to have under this part are
not exhaustive, and the extent of their application depends on—
Division S2.1 Skills
S2.1 Engage the customer for financial advice and planning
S2.2 Gather and validate financial information, including—
(a) the customer's financial situation; and
(b) the customer's investment objectives and risk tolerance; and
(c) the customer's knowledge of and experience in the relevant investment field; and
(d) the nature, volume and frequency of the customer's transactions in the investment field and the period over which they have been carried out; and
(e) the customer's level of education and profession or former profession
S2.3 Analyse the customer's financial situation and assess the customer's demands and needs
S2.4 Research and select appropriate financial solutions to inform recommendations
S2.5 Advise on suitable financial solutions and agree the next steps
S2.6 Explain possible disadvantages that a course of action advised might have for the customer, including the nature of the risks involved
S2.7 Implement financial solutions
S2.8 Review and respond to the customer's changing financial needs and circumstances
S2.9 Deal with requests to cancel policies or investments
S2.2.A Retail customersS2.21 Unless the firm demonstrates to the satisfaction of the Regulatory
S2.22 The individual must have—
(a) the CII Award in Financial Planning; or
Note In satisfying itself for the purposes of this paragraph, the
Regulatory Authority may have regard to qualifications
recognised as appropriate for the role by another regulator (for
example, the Financial Services Authority (UK), the Australian
Securities and Investments Commission, the New Zealand
Securities Commission, the Financial Industry Regulatory
Authority (US), the Securities and Futures Commission (Hong
Kong) or the Monetary Authority of Singapore). Such
qualifications may include legal, accounting, audit, risk and other
Subdivision S2.2.B Business or commercial customersS2.25 Level of knowledge appropriate for role (which may be
Division S2.3 Experience and other elementsS2.31 Experience appropriate for the role (unless the individual is being
Example of exception to rule S2.31
CII Award in Financial Planning may be conditionally approved under
rule 4A.4.2 despite the lack of experience in the customer facing function with
retail customers if the individual will be likely to obtain the appropriate
Part S3 Customer facing function
competencies—relevant
investmentsNote for part S3
Division S3.1 Skills
Subdivision S3.1.A Advising on, and arranging deals in,investments (excluding long terminsurance contracts and units incollective investment schemes)
Examples of roles performing this function—advising on investments
2 investment strategist
5 advising on securities or derivatives
6 institutional sales
7 commodities futures broker
S3.1 Develop an investment strategy to meet agreed investment objectives
S3.2 Analyse the risk and return profile of asset types for customers
S3.3 Construct a risk profile for a proposed portfolio change
S3.4 Make contact with the customers and gather and validate financial information relevant to the securities or derivatives market
S3.5 Follow the initial contact process with customers and engage customers for financial advice and planning
S3.6 Open an account and carry out appropriate administration for customers in securities or derivatives market
S3.7 Establish the investment objectives of customers
S3.8 Analyse the customers' financial situation and assess the customers' demands, needs and investment objectives
S3.9 Research and select appropriate financial solutions to inform recommendations
S3.10 Advise on appropriate financial solutions and agree the next steps
S3.11 Review and respond to the customers' changing financial needs and circumstances
S3.12 Advise customers on investment strategy and investment selection
S3.13 Monitor individual portfolio performance using appropriate comparators
S3.14 Prepare investment recommendations for re-structuring an individual or corporate portfolio
S3.15 Report to customers on investment performance
Subdivision S3.1.B Managing investments
Examples of roles performing this function—managing investments
1 private client asset management
2 discretionary and specialised portfolio management
4 investment manager
5 institutional asset manager
6 investment banker working in asset management
7 portfolio manager
S3.21 Develop an investment strategy to meet agreed investment objectives
S3.22 Implement a defined investment strategy
S3.23 Analyse the risk and return profile of asset types
S3.24 Construct a risk profile for a proposed portfolio change
S3.25 Make contact with the customers and gather and validate financial information relevant to the securities or derivatives market
S3.26 Monitor individual portfolio performance using appropriate comparators
S3.27 Review and re-structure an individual or corporate portfolio
S3.28 Establish and operate individual or corporate investment portfolio performance monitoring procedures
S3.29 Report to customers on investment performance
Subdivision S3.1.C Dealing in investments
Examples of roles performing this function—dealing in investments
1 private client stock broker
2 trader in securities, equities, futures or bonds
3 securities underwriter
4 dealing in securities or derivatives
5 commodities futures broker
S3.31 Dealing in investments following receipt of orders or instructions from customers
S3.32 Dealing in investments on the firm's own account
Subdivision S3.1.D Research and analysis as part ofadvising on investments or otherregulated activities
Examples of roles performing this function—research and analysis
1 corporate finance analyst
2 security or investment analyst
3 derivatives analyst
Guidance for subdivision S3.1.D
Before assessing an individual's research and analytical skills, rule 4A.2.3(4) requires that the regulated activity or activities to be conducted by the individual be taken into consideration in determining the extent of the application of the competencies in this part. If the research and analysis to be performed by the individual are not in relation to a regulated activity (for example, if the research and analysis are for publication in a newspaper article that does not constitute giving advice on investments), then the individual need not be assessed against the competencies in this part. If the individual's research and analysis are part of conducting the regulated activity of advising on investments, then the individual must be assessed against the competencies in this part and approved as an approved individual.
S3.41 Analyse and report implications of sector economics on investments
S3.42 Analyse and report implications of national economics on investments
S3.43 Analyse and report implications of international economics and foreign exchange markets on investments
S3.44 Carry out financial and investment analysis of an individual business
S3.45 Carry out financial and investment analysis of a collective investment scheme
S3.46 Provide equity capital research and analysis support for portfolio management activities
S3.47 Provide fixed interest securities research and analysis support for portfolio management activities
S3.48 Provide research and analysis of alternative investments support for portfolio management activities
S3.49 Provide cash and currencies research and analysis support for portfolio management activities
S3.50 Provide property based markets research and analysis support for portfolio management activities
S3.51 Interpret and analyse a collective investment scheme's objectives and parameters
S3.52 Benchmark a collective investment scheme's performance against investment objectives
S3.53 Review a collective investment scheme portfolio and adjust investments within the scheme's objectives
Division S3.2 Knowledge
Subdivision S3.2.A Retail customersS3.61 Unless the firm demonstrates to the satisfaction of the Regulatory
Authority that the individual does not need a CISI Regulatory qualification (or its equivalent) to perform the role, the individual
S3.62 The individual must have a qualification that the Regulatory
Authority is satisfied (on the basis of evidence produced by the firm
if the Regulatory Authority so requires) is appropriate for the role.
Subdivision S3.2.B Business or commercial customerS3.65 Level of knowledge appropriate for role (which may be
Division S3.3 Experience and other elements
S3.71 Experience appropriate for the role (unless the individual is being assessed against this element for the purposes of a conditional approval)
Example of exception to rule S3.71
An individual who has recently obtained the CISI Regulatory qualification and the appropriate technical qualifications may be conditionally approved under rule 4A.4.2 despite the lack of experience in the customer facing function with retail customers if the individual will be likely to obtain the appropriate experience competency within 12 months.
INDI App 1 Guidance on Fitness and Propriety of Approved Individuals [deleted]
Deleted by QFCRA RM/2011-5 (as from 1st January 2012) and substituted by Schedules 1 and 2.
INDI App 1 Guidance [deleted]
INDI A1.1 Honesty, Integrity and Reputation [deleted]
INDI A1.1 Guidance [deleted]
INDI A1.2 Competence and Capability [deleted]
INDI A1.2 Guidance [deleted]
INDI A1.3 Financial Soundness [deleted]
Individuals Rulebook Rule Making Instrument No. 3, 2005 (RM03/2005)
Made: 13 October 2005
Version: INDI-VER1-Oct05
Prudential–Insurance Rulebook Rule Making Instrument No. 2006/01 (RM2006/01 annex C)
Version: INDI-VER2-Sep06
Conduct of Business Rulebook Rule Making Instrument 2007 (RM2007/01 att E)
Made: 28 June 2007
Version: INDI-VER3-June07
Rulebooks (Miscellaneous Amendments) Rules 2008 (RM2008/01 sch 2, pt 2.7)
Version: INDI-VER4-Feb08
INDI s 2.1 Description of Controlled Functions
INDI r 2.1.11 ins RM2006/01
INDI s 2.2 Additional Requirements for specific Controlled Functions
INDI r 2.2.5 ins RM2006/01
INDI s.2.3 Required Functions
INDI r 2.3.1 sub RM2007/01
INDI r 2.3.3 ins RM2006/01
INDI r 2.3.4 ins RM2006/01
g (a r.2.3.4) ins RM2006/01
INDI s 3.1 Application to register as an Approved Individual
INDI r 3.1.1n ins RM2008/01
INDI r 3.1.2g om RM2008/01
INDI s 3.4 Notification of removal or resignation of Approved Actuary
INDI s 3.4hdg ins RM2006/01
INDI r 3.4.1 ins RM2006/01
INDI r 3.4.2 ins RM2006/01
INDI r 3.4.3 ins RM2006/01