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The Directory - a New Public Register for Financial Services

8th April 2019

The FCA Finalise Plans for The Directory

Last month the Financial Conduct Authority published PS19/7 – a Policy Statement that sets out the final rule on ‘The Directory’ as was consulted upon in CP18/19 last year.

Why does the FCA need a new public register?

At present, both regulated firms and individuals that have been approved for performing certain functions by the FCA are detailed upon the Financial Services Register (the FS Register). This currently includes information on a firm’s senior management, its control staff and those approved for performing customer facing roles.

Once the Senior Managers & Certification Regime (SM&CR) has been extended to all firms in December, only those approved by the regulator for holding Senior Management functions will appear on the FS Register.

At present, whilst the Approved Persons Regime is also currently in place for some, those also approved for controlled functions (CFs) also show on the FS Register. However, once the Approved Persons regime has been fully replaced by SM&CR in December then a number of individuals, no longer requiring approval by the regulator, will be removed from the FS register.

For example, under SM&CR, those performing Customer functions, including those who provide financial advice or help with pension transfers, will be assessed as fit and proper by the firm at which they work, rather than by the FCA. As such, they would no longer appear in the list of approved persons on the FS Register.

As a result, the FCA is looking to introduce a new Directory that will become a new public register for checking the details of key individuals that work within the financial services industry.

The Directory: who will be detailed?

Not only will The Directory include information that is currently found on the Financial Services Register about individuals registered for specific functions within regulated firms, as well as information about other individuals that perform roles that will no longer made public on the FS Register (once the SM&CR is fully introduced), but also information about additional individuals that are not approved by the FCA.

The Directory will make public information on additional individuals carrying out a wider range of roles than just those authorised by the regulator. Financial advisers, traders, portfolio managers and additional directors will be detailed. In addition, details of individuals, such as those providing advice on mortgages, will be detailed for the first time.

The Directory will have a newly designed user interface developed to be clear and easy for people to use and information will be published upon The Directory on an ongoing basis with the aim to help protect consumers and firms by making it easier for them to check whether an individual works at an authorised firm.

Directory details for any specific firm will then have additional details listed showing the relevant Directory Persons such as:

• workplace location: a list of individuals active in specific areas
• business qualified to carry on: a list of individuals who hold appropriate qualification (such as able to provide mortgage advice)

In addition, The Directory will provide the facility to check which individuals are prohibited by the UK regulators, or those who have limitations placed upon the activities which they are permitted to undertake.

It is thought that The Directory will also be hugely beneficial to those such as law enforcement, professional bodies and other regulators in helping them build intelligence, monitor the market as well as target interventions.

Required Action by Firms:

The creation of The Directory will affect all relevant individuals who carry out work on behalf of almost every FCA-regulated firm.

For those firms where the SM&CR already applies (Banking firms and insurers), the FCA have said they can start submitting data on Directory individuals from around September 2019. This will likely be required to be submitted via the FCA’s online Connect system. Once SM&CR is in place for all other firms on 9th December 2019, they can then start to submit the same.

Firms are reminded that they need to take all the necessary action to gather the required information and ensure it is accurate before submitting to the regulator.

What will The Directory mean for firms going forwards?

The regulator has said that firms would need to report certain information to them about their Directory Persons, including information on the individual’s role, their workplace location and the types of business they are qualified to undertake.

Additionally, firms will be fully responsible for ensuring the suitability of Directory Persons where individuals are not subject to regulatory approval, as well as be responsible for the timely and accurate reporting of Directory information on an ongoing basis.

To read full details of the finalised plans for The Directory, see PS19/7 here.

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