Finance sector slow to gear up for new rules

Employers in the finance sector risk fines because many HR professionals are
not prepared for the Financial Services and Markets Act which came into force
on December 1.

Robbie Gilbert, chief executive of the Employers Forum on Practice and
Statute, is concerned that some HR departments are not aware of their
responsibilities in helping companies comply with the Act, which is regulated
by the Financial Services Authority.

Under the regulations, firms in the finance sector must ensure employees are
properly qualified and trained or risk action – including fines – from the FSA.

Gilbert said, "We share the FSA’s concerns that HR is not prepared
across the sector. It has not taken on board the extent to which people’s
competencies and development have to be checked – from chief executives
downwards, not simply those directly involved with financial regulation."

David Jackman, FSA head of industry training, urged HR professionals in the
sector to get up to speed on the requirements.

"Anecdotal evidence suggests that some firms may not be prepared and in
particular there may not be an awareness within HR departments that these rules
affect them.

"There needs to be an effective partnership between line management and
HR to make these requirements work.

Jackman stressed HR must also be aware of the Act when recruiting. "HR
departments need to be familiar with the rules on recruitment as these include
the need to relate the skills and knowledge of a potential employee to the
knowledge and skills required for a role, and the taking of reasonable steps to
obtain sufficient information about a potential employee’s previous relevant
activities and training."

Under the Act firms must ensure:

– Employees are competent

– Employees remain competent for the work they do

– Employees are appropriately supervised

– Employees’ competence is regularly reviewed and the level of competence is
appropriate to the nature of the business

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