Previously the FSA commissioned Europe Economics (EE) to undertake a cost-benefit analysis of financial firms’ use of exams to comply with the current T&C exam requirements (TC 2.4.5R). EE has now published its analysis in a paper which is entitled Training and Competence Sourcebook Review. The reason for the study is the FSA’s general review of the T&C Sourcebook and also that the Markets in Financial Instruments Directive (MiFID) will most likely result in the presence of inwardly-passporting firms that do not face an exams requirement from their Home State regulator.

In the paper the overall conclusion of EE is that, at the moment, maintaining an exam requirement is a relatively harmless way of delivering an important regulatory gain, and is not undermined by the fact that MiFID prevents it from being extended to all firms, but that this should be kept under review.