FCA publishes new webpage on determining competencies of compliance officers and MLRO candidates
On February 28, 2022, the FCA issued a new webpage to help companies decide whether an individual candidate is sufficiently competent and able to effectively perform the duties of a compliance officer or money laundering reporting officer (MLRO). FCA considers that they will need the necessary skills and knowledge, training and experience to be effective, the level of which should be appropriate to the size of the business and its risk of harm.
The advice, based on FCA’s experience of successful applications, includes the following:
- Training: Most successful candidates will have already completed training courses suitable or relevant to the company they propose to work for before seeking FCA approval. This training should provide up-to-date knowledge of applicable regulatory rules and expectations and should be of sufficient length and depth appropriate to the role. The FCA has recommended that courses with examination or assessment are more effective in demonstrating that an individual has acquired relevant knowledge.
- Live: Individual candidates do not need to have held compliance officer or MLRO positions in the past to be successful. They may have held more junior compliance positions in the past, such as compliance officer or deputy MLRO. Having previously held the same or similar approved positions is a good demonstration that someone may be suitable for these roles, but it does not mean that a candidate will automatically be approved. Successful candidates for compliance officers and MLROs should have a range of backgrounds and backgrounds, including in compliance and legal teams, lawyers, accountants and consultants, and not just in a supervisory role. First line.
- Third party support: Applicant companies will sometimes have or intend to obtain some level of compliance support from outside advisors (e.g. lawyers or compliance consultants), to assist them in their application or operation. continuity of their compliance function. This is not a necessary requirement but can be useful in addition to internal company functions, candidate companies tend not to be successful when this external support is the company’s only compliance resource. However, even with external support, the person responsible for compliance and the MLRO function must have enough knowledge and experience to make business-relevant compliance decisions, know when to seek advice and how to implement the advice received.
- Ability: Some smaller companies may offer someone to take on the role on a part-time basis, and the FCA has accepted these proposals in some cases. However, the time devoted to the role must be proportionate and sufficient, candidates who only intend to fill the role for a few hours a week have usually failed. If the compliance officer or proposed MLRO has another role within or outside the business, the FCA will consider whether there are any conflicts of interest. Also, candidates who do not work from the company’s primary place of business or who are not senior company executives, such as outside compliance consultants, often fail.
It is also important to note that even if a candidate believes they have sufficient experience or training under the guidelines, the FCA may still request an interview to assess skills and will also review the candidate’s response to questions posed during the interview process. candidacy.