Today the Financial Markets Authority (FMA) has released three new self-assessment tools (Self-Assessment Tools) to help financial advice providers (FAPs) prepare for full licensing.
Who needs to read it? Why?
This update will be of significance to anyone that currently holds a FAP transitional licence, or anyone who is expecting to give financial advice in the future and are looking to apply for a FAP full licence.
All providers of regulated financial advice to retail clients will need a FAP licence.
What does it cover?
The Self-Assessment Tools take the form of checklists, which FAPs can use to assess their existing business practices within a certain area. Within the checklists, there are three columns:
Are you ready?
- This column details a series of questions posed by the FMA that allows the business to assess whether their existing practices meet the requirements in a certain area to be issued a Class 1 or 2 full FAP licence.
- This blank column allows the business to conclude whether they meet the requirements posed in the ‘Are you ready’ column.
Steps still required
- This blank column allows the business to detail what further steps/actions they need to take (if any) to fulfil all the requirements posed in the ‘Are you ready’ column.
The Self-Assessment Tools currently cover three of the seven standard conditions that apply to full FAP licences, these being:
- Standard Condition 1 – Record Keeping
- Standard Condition 4 – Outsourcing
- Standard Condition 5 – Business Continuity and Technology Systems
The FMA has stated that other Self-Assessment Tools covering the other standard conditions will be developed and released in advance of the 30 September 2022 target date for the submission of full licence applications.
We welcome the development and publication of these new Self-Assessment Tools as they provide greater guidance to businesses who are seeking to apply for a full FAP licence as to the capabilities that the FMA is seeking to have demonstrated. The intention is that the use of these Self-Assessment Tools, alongside the full licence application kit, will “give transitional licence holders the confidence to apply for a Class 1 or Class 2 full licence”. These tools will be especially useful for smaller businesses, who may not have as many resources to draw upon when going through the full licence application process.