For certain activities in the financial sector the Financial Conduct Authority (FCA) formerly known as Financial Services Authority (FSA), the regulator of the financial services industry in the UK, requires a minimum of qualification. Originally, it had mandated the Financial Sector Skills Council to issue standards for these activities and accredit qualifications that match these standards, i.e., people holding these approved qualifications are qualified for the respective activities.
Recently, the Financial Conduct Authority has taken back control of some activities under the Retail Distribution Review (RDR), an initiative to strengthen the financial centre of London. The activities falling under the RDR are
- Advising and/or dealing with securities and/or derivatives
- Advising on packaged products
“Managing Investments” is an activity that is not officially part of the RDR, but often treated as one. Under the RDR, qualifications need to be set at least at Qualifications and Credit Framework (QCF) level 4. The CIWM and CIIA designations both comfortably fulfil this threshold requirement.
The Retail Distribution Review (RDR) applies to “retail facing” investment professionals, only . That is, those CIWM and CIIA holders working in the wholesale sector are unaffected by the RDR and the existing UK CIWM and CIIA recognitions continue to be valid for such investment professionals. The new examination requirements have a very strong UK markets, regulation, products, and tax orientation. As a consequence of the RDR, practitioners in the UK with a retail facing role will need to be RDR recognised from 2013 onwards.
The CIWM and CIIA are now recognised by the FCA in the UK as being an RDR compliant qualifications in the following four activities defined in TC Appendix 1.1.1R :
Activity No. 2
- Advising on (but not dealing in) securities*
Activity No. 3
- Advising on (but not dealing in) derivatives*
Activity No. 12
- Advising on and dealing in securities*
Activity No. 13
- Advising on and dealing with or for clients in derivatives
(* which are not stakeholder pension schemes or broker funds)
In order for a CIWM or CIIA graduate to practice in the UK they need to have passed two modules such as those offered by The Chartered Institute for Securities & Investment CISI. There are two modules that cover the new UK content which are available under their Investment Advice Diploma:
- FCA regulation and profes sional integrity; and
- Investment, risk and taxation.
Both modules need to be completed to cover the UK element.