The FSA today confirmed plans imposing a 30 month deadline for individuals to complete all modules of qualifications required for their role.
The time limit, which comes into force from 1 January next year, applies to all approved persons.
Retail investment advisers remain subject to the current RDR proposals to achieve QCF Level 4 in a relevant qualification by 1 January 2013.
Today's policy statement affects mortgage brokers, pension transfer specialists and equity release advisers.
The rules are part of the FSA's bid to significantly beef up its Training and Competence (TC) regime.
All employees at regulated firms "should be required to be competent and should pass qualifications due to the link between competence and potential consumer detriment", the FSA says.
From 1 January next year, regulated individuals will have 30 months to complete a qualification required for their role. The rule applies on a rolling basis starting the moment an individual joins a firm.
Qualifications that meet FSA regulatory requirements will now be listed in the FSA Handbook so that firms and individuals will have a source of approved qualifications.
Firms must ensure any employee who does not attain an appropriate qualification within the specified time 'ceases to engage in the activity to which that qualification would relate' and 'does not resume that activity without first attaining an appropriate qualification'.
The regulator adds firms may wish their employees to attain an appropriate qualification within an earlier time limit or to place limits on the number of times that qualification can be taken.
Firms are permitted to disregard any period of 60 business days or more during which the employee is continuously absent from carrying out or supervising an activity.
Further changes in today's paper clarify how individuals operating under the Significant Influence Function should be responsible for ensuring the competence of employees in their designated area of the business.
Peter Smith, head of investments policy at the FSA, says: "Competence and approved persons requirements are key elements of our regulatory regime and over the last few years we have increased our scrutiny of individuals working in the financial services industry.
"Today's new rules strengthen and clarify our overall competence requirements and ensure firms and individuals are maintaining standards of competence and behaviour at an appropriate level."
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