Individuals Rules 2005 (INDI)

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Individuals Rulebook (INDI)
Background to this Rulebook
INDI 1: General provisions	INDI 1.1.1 Name of rules
	INDI 1.1.2 Glossary
	INDI 1.1.3 Application of INDI
INDI 2: Controlled Functions	INDI 2 Guidance
	INDI 2.1 Description of Controlled Functions
	INDI 2.2 Additional Requirements for specific Controlled Functions
	INDI 2.3 Required Functions
INDI 3: Approved actuaries	INDI 3.1 Application to register as an Approved Individual [Deleted]
	INDI 3.2 Application for modification of Approved Individual status [Deleted]
	INDI 3.3 Application for withdrawal of Approved Individual status [Deleted]
	INDI 3.4 Notification of removal or resignation of Approved Actuary
INDI 4: Principles for training and competency	INDI 4.1.1 Principle 1—senior management responsibility
	INDI 4.1.2 Principle 2—training and competency programme
	INDI 4.1.3 Principle 3—assessment of competencies
	INDI 4.1.4 Principle 4—training
	INDI 4.1.5 Principle 5—record keeping
INDI 4A: General provisions	INDI 4A.1 General provisions
	INDI 4A.2 Assessment of individuals for controlled functions
	INDI 4A.3 Approval of individuals for controlled functions
	INDI 4A.4 Conditional approval of individuals for customer facing function
INDI 5: Training and other ongoing obligations relating to controlled functions	INDI 5.1.1 Obligation to review competencies
	INDI 5.1.2 Obligation to review training and development needs
	INDI 5.1.3 Continuing professional development for approved
	INDI 5.1.4 Record keeping—controlled functions
INDI 6: Performance of Controlled Functions	INDI 6.1 Multiple Appointments
	INDI 6.2 Temporary Cover
	INDI 6.3 Individuals ceasing to exercise controlled functions
INDI 7: Principles	INDI 7.1 Principles of Conduct for Approved Individuals
INDI 8: Miscellaneous	INDI 8.1.1 Approved forms to be used
	INDI 8.1.2 Completion of forms
INDI schedule 1: Competencies for controlled functions other than customer facing function
INDI schedule 2: Competencies for customer facing function
Glossary
Endnotes

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

Background to this Rulebook

1. This rulebook further clarifies the statements and requirements set out in the FSR relating to the performance of Controlled Functions by individuals.

2. The Principles of Conduct for Approved Individuals is drawn up in accordance with Article 15(3) of the FSR and have the status of Rules. A breach of these principles may form the basis of disciplinary action by the Regulatory Authority. The Principles of Conduct are a general statement of the standards expected of Approved Individuals and apply directly to the conduct of business and carrying out of Controlled Functions by Approved Individuals.

3. The Principles of Conduct are not exhaustive of the standards expected. Conformity with the principles does not absolve a failure to observe other requirements in the Rules, while the observance of other requirements in the Rules does not necessarily amount to conformity with the Principles of Conduct.

4. Failure by an Approved Individual to comply adequately with the Principles of Conduct is likely to impact on the Regulatory Authority's assessment of that Approved Individual's Fitness and Propriety.

5. INDI-VER2-Sep06 incorporates amendments made by Prudential – Insurance Rulebook Rule Making Instrument No. 2006/01 (RM2006/01). See the endnotes for rulebook and amendment history.

Financial Services Regulations

Article 41 of FSR provides as follows:

Approved Persons performing Controlled Functions

(1) An Authorised Firm must ensure that no individual acting for:

(A) the Authorised Firm; or

(B) a contractor of the Authorised Firm

performs a Controlled Function for that Authorised Firm unless the individual is approved by the Regulatory Authority as an Approved Individual.

(2) Controlled Function means a function which involves:

(A) the exercise of significant influence over the conduct of the firm's affairs in relation to Regulated Activities;

(B) dealing directly with clients or customers in relation to Regulated Activities; or

and is specified as a Controlled Function in Rules issued by the Regulatory Authority from time to time.

(3) The Regulatory Authority shall make Rules detailing:

(A) the procedure for Application to the Authority for registration as an Approved Individual including requirements as to the form and content of the Application, any fees payable by an Authorised Firm in respect of its Approved Individuals and the procedures for modification or withdrawal of an Approved Individual's registration;

(B) principles or other requirements to which Approved Individuals are required to adhere in the performance of Controlled Functions;

(D) the circumstances in which registration of an Approved Individual may be withdrawn at the instance of the Regulatory Authority.

Amended by QFCRA RM/2011-4 (as from 1st July 2011).

INDI 1 General provisions

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 1.1 Application [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 1.1.1 Name of rules
These rules are the Individuals Rules 2005 (or INDI).

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 1.1.2 Glossary
The glossary at the end of these rules is part of these rules.

Note 1 There are also relevant definitions in the INAP glossary. To assist the reader, the application of a definition in that glossary would usually be indicated by the word(s) being in italics (other than bold italics).

Note 2 By contrast, the application of a definition in the glossary in these rules is not indicated by the word(s) being in italics.

Note 3 For the application of definitions, see INAP, rule 2.1.8 (Application of definitions).

Note 4 A note on or to these rules is explanatory and is not part of the rules (see INAP, rule 2.1.6 (1) and rule 2.1.7).

Note 5 However, examples and guidance are part of these rules (see INAP, rule 2.1.4 (1) (b) and (2)).

Note 6 An example is not exhaustive, and may extend, but does not limit the meaning of these rules or the particular provision of these rules to which it relates (see INAP, rule 2.1.5).

Note 7 For the effect of guidance, see FSR, article 17(4).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 1.1.3 Application of INDI
These rules apply to—

(a) an authorised firm operating, or applying to operate, in or from the QFC; and

(b) an individual approved, or applying for approval, to perform a controlled function.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 2 Controlled Functions

INDI 2 Guidance
1. Although job titles may be indicative of a function performed, the test as to whether or not an individual is carrying on any particular Controlled Function outlined under INDI section 2.1 is whether the activity or role that individual performs for or on behalf of an Authorised Firm falls within the description of that Controlled Function.

2. The Regulatory Authority is of the view that in most cases it will be prudent for an Authorised Firm to have a contractual relationship with any individual carrying on a Controlled Function for or on behalf of the Authorised Firm to govern the manner in which that Controlled Function is performed. However, an individual may carry on a Controlled Function for an Authorised Firm even if there is no contractual relationship between the individual and the Authorised Firm. For example, the regional head of an Authorised Firm's Group may have no direct contractual relationship with an Authorised Firm but may carry on the Senior Executive Function for that Authorised Firm.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 2.1 Description of Controlled Functions

INDI 2.1.1
Each of the functions described in rules 2.1.2 to 2.1.11 is a controlled function for the purposes of Article 41(2) of the FSR.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

Senior Executive Function

INDI 2.1.2
The Senior Executive Function is the function of having overall responsibility alone or jointly with one or more individuals:

(A) for the conduct of the whole of the business of an Authorised Firm; or

(B) in the case of an Authorised Firm established outside the QFC operating through a branch in the QFC (a Non-Local Firm), for the business of the Authorised Firm carried out in or from the QFC.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 2.1.2 Guidance
In most cases, the Regulatory Authority would expect an Authorised Firm to have one individual performing the Senior Executive Function.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

Executive Governance Function

INDI 2.1.3
(1) Subject to (2), the Executive Governance Function is the function of acting in the capacity of a Director, other than a Non-Executive Director, of an Authorised Firm.

(2) The Executive Governance Function does not extend to Directors of a Non-Local Firm who are not responsible for the Regulated Activities carried on by that Authorised Firm in or from the QFC.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

Non-Executive Governance Function

INDI 2.1.4
The Non-Executive Governance Function is the function of holding a position on the Governing Body of a Local Firm but not having responsibility for the day-to-day direction of a Local Firm's affairs.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

Compliance Oversight Function

INDI 2.1.5
The Compliance Oversight Function is the function of having responsibility for compliance matters of an Authorised Firm as provided in CTRL section 4.3.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

Risk Management Function

INDI 2.1.6
The Risk Management Function is the function of having responsibility in relation to setting and controlling an Authorised Firm's risk exposure as provided in CTRL section 4.4.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

Finance Function

INDI 2.1.7
The Finance Function is the function of having responsibility for ensuring that an Authorised Firm complies with the Regulatory Authority's prudential requirements.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

MLRO function

Amended by QFCRA RM/2010-03 (as from 30th April 2010).

INDI 2.1.8
The MLRO function is the function of being an authorised firm's MLRO under AML/CFTR.

Amended by QFCRA RM/2010-03 (as from 30th April 2010).

Senior Management Function

INDI 2.1.9
The Senior Management Function is carried on by an individual who has significant responsibility either alone or with others for management and supervision of one or more elements of an Authorised Firm's business relating to its Regulated Activities other than those matters identified in INDI Rule 2.1.2 to 2.1.8.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

Customer Facing Function

INDI 2.1.10 Customer facing function
Customer facing function is the function of carrying on 1 or more of the following regulated activities with or for a customer on behalf of an authorised firm in or from the QFC—

(a) dealing in investments;

(b) managing investments;

(c) advising on investments;

(d) arranging deals in investments;

(e) insurance mediation.

Amended by QFCRA RM/2011-4 (as from 1st July 2011).

Actuarial Function

INDI 2.1.11
The Actuarial Function is the function of having responsibility for monitoring, advising, investigating and reporting on risks facing an Insurer that materially impact on the Insurer's ability to meet policyholder liabilities and on capital levels.

Derived from QFCRA RM01/2006 (as from 1st October 2006).

INDI 2.2 Additional Requirements for specific Controlled Functions

INDI 2.2.1
The Senior Executive Function must be carried out by an individual who:

(A) in the case of a Local Firm is ordinarily resident in the State; and

(B) in the case of a Non-Local Firm spends an appropriate proportion of his time in the State having regard to responsibilities that the Senior Executive Function entails.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 2.2.2 [Deleted]

Deleted by QFCRA RM/2010-03 (as from 30th April 2010).

INDI 2.2.3
Subject to INDI Rule 2.2.4, the Regulatory Authority will only register one individual for the Compliance Oversight Function in respect of an Authorised Firm.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 2.2.4
The Regulatory Authority may, if it considers it appropriate in the circumstances, register more than one individual to perform the Compliance Oversight Function in respect of different internal business divisions within a large Authorised Firm provided that one individual is appointed with responsibility for the overall Compliance Oversight Function for the whole of the Authorised Firm.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 2.2.5
An individual can only be registered to perform the Actuarial Function if he also meets the following additional criteria:

(A) he is not carrying on the Controlled Functions of Senior Executive Function, Executive Governance Function or Non-Executive Governance Function of the Insurer, or of a Related Body Corporate (except when that Related Body Corporate is a Subsidiary of the Insurer);

(B) he is neither an approved auditor (under Article 85(1) of the QFC Companies Regulations or Article 37 of the Limited Liability Partnerships Regulations) for the Insurer, nor an employee or director of an entity of which that auditor is an employee or director nor a partner of that auditor.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 2.2.5 Guidance
Because of the critical role played by the Actuarial Function, additional criteria are placed on Approved Actuaries to ensure their independence, education, skill and experience.

Derived from QFCRA RM01/2006 (as from 1st October 2006).

INDI 2.3 Required Functions

INDI 2.3.1
(1) Every authorised firm must have at least 1 individual approved to carry on the following functions:
(A) senior executive function;

(B) compliance oversight function;

(C) finance function;

(D) the MLRO function.

(2) Every insurer (other than a QFC captive insurer) must, as well as having at least 1 individual approved to carry on the functions mentioned in subrule (1), have a member of its senior management approved to carry on the risk management function.

Note See CTRL, r 4.4.4 (2).

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 2.3.2
If more than one individual is appointed to perform any of the Controlled Functions listed in INDI Rule 2.3.1 the Authorised Firm must ensure that the allocation of responsibility for the purposes of CTRL section 3.1 clearly avoids duplication or omission.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 2.3.3
An insurer (other than a QFC captive insurer) conducting Long Term Insurance Business must have at least one individual approved to carry on the Actuarial Function.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 2.3.4
An insurer (other than a QFC captive insurer) conducting General Insurance Business, where:

(A) more than 15 per cent of the Insurer's gross outstanding liabilities are attributable to Contracts of Insurance for General Insurance Business in PINS Category 1; or

(B) more than 20 per cent of the Insurer's gross outstanding liabilities are attributable to Contracts of Insurance for General Insurance Business in PINS Category 4

must have at least one individual approved to carry on the Actuarial Function.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 2.3.4 Guidance
The purpose of INDI Rules 2.3.3 and 2.3.4 is to ensure all Insurers carrying out Contracts of Insurance where either the Contract of Insurance is in force for more than one year or where a material potion of these Contracts of Insurance include long-tail business, are required to seek actuarial advice. Long-tail business comprises classes of Insurance Business where the claims are typically settled one year or more after the date of the occurrence of the event that gives rise to the claim.

Derived from QFCRA RM01/2006 (as from 1st October 2006).

INDI 2.4 Transitional arrangements

Inserted by QFCRA RM/2010-03 (as from 30th April 2010).

INDI 2.4.1 Transitional arrangements — MLRO function
(1) This rule applies if, immediately before its commencement, an individual was approved to exercise the money laundering reporting function for an authorised firm.

(2) The approval is taken, after the commencement of this rule, to be the approval of the individual to exercise the MLRO function for the firm.

Amended by QFCRA RM/2010-04 (as from 1st October 2010)

INDI 2.4.2 Transitional arrangements — MLRO residency
(1) This rule applies if, immediately before its commencement, a waiver or modification notice was in force under the Financial Services Regulations in relation to rule 2.2.2.

(2) The notice applies, after the commencement of this rule, as if —
(a) it were a notice given in relation to the Anti-Money Laundering and Combating Terrorist Financing Rules 2010, rule 2.3.2 (2) (Eligibility to be MLRO or deputy MLRO); and

(b) any necessary changes were made to the notice to give effect to the waiver or modification given by it.

Amended by QFCRA RM/2010-04 (as from 1st October 2010)

INDI 3 Approved actuaries

Amended by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 3.1 Application to register as an Approved Individual [Deleted]

Deleted by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 3.1.1 [Deleted]

Deleted by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 3.1.2 [Deleted]

Deleted by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 3.1.2 Guidance [Deleted]

Deleted by QFCRA RM01/2008 (as from 7th April 2008).

INDI 3.2 Application for modification of Approved Individual status [Deleted]

Deleted by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 3.2.1 [Deleted]

Deleted by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 3.3 Application for withdrawal of Approved Individual status [Deleted]

Deleted by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 3.3.1 [Deleted]

Deleted by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 3.3.2 [Deleted]

Deleted by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 3.3.2 Guidance [Deleted]

Deleted by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 3.3.3 When application to withdraw registration of approved individual must be made [restructured effective 3rd March 2010]

Restructed by QFCRA RM01/2010 (as from 3rd March 2010) to form new rule INDI 6.3.1.

INDI 3.4 [Deleted]

Deleted by QFCRA RM/2010-04 (as from 1st October 2010)

INDI 3.1.1 Insurer to give notice before removal of approved actuary
(1) An insurer must give the Regulatory Authority reasonable advance notice of at least 2 business days of a proposal to remove an approved actuary for the insurer.

(2) The notice must include the reasons for the removal.

Amended by QFCRA RM/2010-04 (as from 1st October 2010)

INDI 3.1.2 Notification by insurer if appointment of approved actuary ends
If the appointment of an approved actuary for an insurer ends for any reason, the insurer must tell the Regulatory Authority immediately, but by no later than the second business day after the day the appointment ends —

(a) that the appointment has ended; and

(b) the reason for the appointment ending.

Note For the obligation of the approved actuary to notify the Regulatory Authority if the actuary's appointment ends, see Financial Services Regulations, art 91 (Resignation of auditors and actuaries).

Amended by QFCRA RM/2010-04 (as from 1st October 2010)

INDI 3.1.3 Insurer must appoint approved actuary if vacancy arises
If at any time there is not an approved actuary for an insurer, the insurer must appoint an approved actuary as soon as practicable, but within 3 months after the day the vacancy arises.

Amended by QFCRA RM/2010-04 (as from 1st October 2010)

INDI 3.1.4
(1) If an Insurer, which is required to appoint an Approved Actuary under INDI Rule 2.3.3 or 2.3.4, fails to do so within 28 days of a vacancy arising, the Regulatory Authority may appoint one or more actuaries to perform any function corresponding to the actuarial function on the following terms:
(A) the actuary to be remunerated by the Insurer on the basis agreed between the actuary and the Insurer or, in the absence of agreement, on a reasonable basis; and

(B) the actuary to hold office until he resigns or the Insurer appoints another actuary.

(2) An Insurer must comply with and is bound by the terms on which an actuary has been appointed by the Regulatory Authority under subrule (1).

(3) If the Regulatory Authority appoints an actuary under subrule (1), he will not be an Approved Actuary. However, the Insurer is still under an obligation to appoint an Approved Actuary under INDI Rule 2.3.3 or 2.3.4 and will need to seek prior approval of that person (even if the individual it proposes to appoint is the person who has been appointed by the Regulatory Authority under subrule (1)).

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 3.1.4 Guidance
1. INDI Rule 3.4.3(1) allows, but does not require, the Regulatory Authority to appoint an actuary if the Insurer has failed to do so within the 28 day period. When it considers whether to use this power, the Regulatory Authority will take into account the likely delay until the Insurer can make an appointment and the urgency of any pending duties of the actuary.

2. The Regulatory Authority will not normally seek to appoint an actuary under INDI Rule 3.4.3(1), if an application under INDI Rule 3.1.1 has been received from the Insurer in relation to a proposed appointment of an Approved Actuary as required under INDI Rule 2.3.3 or 2.3.4 and that application is still being considered.

Amended by QFCRA RM/2010-04 (as from 1st October 2010)

INDI 4 Principles for training and competency
Note for chapters 4, 4A and 5

Individuals performing controlled functions need to have the appropriate competency elements of skills, knowledge and experience. Individuals having these competency elements strengthen the protection given to clients, customers and stakeholders. Authorised firms need to prudently manage the risks that may arise as a result of individuals performing controlled functions.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.1 Authorised Firm's assessment of Individuals [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.1.1 Principle 1—senior management responsibility
The senior management of an authorised firm must ensure that the firm's policies, procedures, systems and controls appropriately and adequately address the training and competency requirements in this chapter, chapter 4A and chapter 5.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.1.2 Principle 2—training and competency programme
An authorised firm must design, deliver and maintain an appropriate ongoing training and competency programme for individuals performing controlled functions for the firm.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.1.3 Principle 3—assessment of competencies
An authorised firm must undertake initial and ongoing assessment of each individual's competencies to perform controlled functions.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.1.4 Principle 4—training
An authorised firm must ensure that individuals performing controlled functions receive or undertake sufficient training and continuing professional development.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.1.5 Principle 5—record keeping
An authorised firm must be able to provide documentary evidence of its compliance with the requirements relating to training and competency of individuals performing controlled functions.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.2 Regulatory Authority's assessment of Individuals [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.2.1 [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.2.2 [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.3 Honesty, Integrity and Reputation [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.3.1 [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.4 Competence and Capability [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.4.1 [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.5 Financial Soundness [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4.5.1 [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A Training and competency programme

INDI 4A.1 General provisions

INDI 4A.1.1 Appropriate programme to be delivered etc
(1) An authorised firm must design, deliver and maintain an appropriate ongoing training and competency programme for individuals performing controlled functions for the firm.

(2) The programme—
(a) must be relevant, timely and appropriately structured; and

(b) must ensure that approved individuals are aware, and have an appropriate understanding, of—
(i) their roles, responsibilities and obligations; and

(ii) the firm's processes in so far as they apply to each approved individual's role; and

(iii) any reports that they are required to make; and

(iv) the sources of information for making the reports; and

(c) must include policies, procedures, systems and controls on how the firm is to decide whether individuals are competent to perform controlled functions.

(3) In designing its training and competency programme for approved individuals, the firm must consider the following:
(a) their differing needs, experience, skills and abilities;

(b) their differing roles and levels in the firm;

(c) the degree of supervision over, or independence exercised by, them;

(d) the availability of information needed for them to perform their roles;

(e) the nature, scale and complexity of the firm's business, including—
(i) the products and services offered or provided, and proposed to be offered or provided, by it; and

(ii) changes to those products and services and to the market;

(f) the clients of the firm;

(g) the outcome of reviews of their training and competency;

(h) any analysis showing areas where training needs to be enhanced;

(i) the regulatory system, including any recent, or reasonably expected, changes to it.

Examples for subrule (3)—designing programmes that consider the individual's needs, roles etc
1 training programmes for new approved individuals need to be different to programmes for those who have been approved individuals for some time and are already aware of the firm's policies, processes, systems and controls

2 training programmes for approved individuals performing the customer facing function need to be different to programmes for other approved individuals

3 training programmes for approved individuals performing the customer facing function in relation to securities need to be different to programmes for approved individuals performing the customer facing function in relation to derivatives or contracts of insurance

4 training programmes for approved individuals performing the non-executive governance function should reflect the specific role that each individual performs within the firm (Training obligations for such approved individuals are likely to be less intense than would otherwise be expected for individuals with roles in the day-to-day activities of the firm and might come in the form of the individual's participation and assessment in executive coaching, board retreats and planning days, board peer review as well as through membership of other boards and governing bodies).

(4) Subrule (3) does not limit the matters that the firm may consider.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.1.2 Training must be maintained and reviewed
(1) An authorised firm's training and competency programme must include ongoing training to ensure that approved individuals—
(a) maintain their competencies; and

(b) are kept up to date with developments relating to their controlled functions; and

(c) are trained on any changes to the firm's policies, procedures, systems and controls.

(2) A firm must, at regular and appropriate intervals, review and evaluate—
(a) its training and competency programme and training and competency document for quality and effectiveness; and

(b) the training needs of approved individuals to ensure that their needs are met.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.1.3 Training and competency document
(1) An authorised firm must prepare a document (training and competency document) describing its training and competency programme.

(2) A firm's training and competency document must include—
(a) the requirements, characteristics and role of each of the following controlled functions:
(i) a controlled function for which the firm is required to have at least 1 individual approved under section 2.3 (Required functions);

(ii) any other controlled function for which the firm has an individual performing the function; and

(b) how the firm is to satisfy itself that each individual performing a controlled function has, and continues to have, the competencies required to perform the function; and

(c) the continuing professional development to be provided for approved individuals and the review and evaluation of their training needs; and

Note See rule 5.1.3 (Continuing professional development for approved individuals).

(d) how the firm is to ensure that it complies, and can demonstrate its compliance, with its training and competency programme; and

(e) the review and evaluation of its training and competency programme and training and competency document, including who is to conduct the review and evaluation and when they are to be conducted; and

(f) the revision of its training and competency programme and training and competency document, including who is to approve any revision.

(3) To remove any doubt, revision includes amendment and replacement.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.1.4 Firm must comply with its training and competency programme
(1) An authorised firm must comply with the requirements and procedures in its training and competency programme and training and competency document as revised from time to time.

(2) The individual approved to perform the compliance oversight function for an authorised firm must—
(a) monitor on an ongoing basis the firm's compliance with its training and competency programme and training and competency document; and

(b) report to the firm's governing body at least once a year about the firm's compliance with its training and competency programme and training and competency document.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.2 Assessment of individuals for controlled functions
Note for part 4A.2

Principle 3 (see rule 4.1.3) requires an authorised firm to undertake initial and ongoing assessment of each individual's competencies to perform controlled functions.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.2.1 Initial competency and fitness assessments by firms
Before making an application to the Regulatory Authority for an individual to be approved to perform 1 or more controlled functions, an authorised firm must be satisfied, on reasonable grounds after making appropriate inquiries, that the individual—

(a) has the competencies required to perform each function; and

(b) is a fit and proper person to perform each function; and

(c) satisfies any additional requirements under these or any other Rules for each function.

Note 1 Under FSR, article 41(1) (Approval of persons performing controlled functions), an authorised firm must ensure that no individual performs a controlled function for it unless the individual is approved by the Regulatory Authority as an approved individual.

Note 2 Section 2.2 of these rules sets out additional requirements for particular controlled functions.

Note 3 This rule is subject to rule 4A.4.1 (Application—individuals likely to acquire competencies for customer facing function within 12 months).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.2.2 How competency assessment made by firms
(1) In deciding whether it is satisfied that an individual has the competencies required to perform a controlled function, an authorised firm must have regard to—
(a) the controlled function; and

(b) the nature, scale and complexity of the firm's business, including—
(i) the products and services offered or provided, and proposed to be offered or provided, by it; and

(ii) changes to those products and services and to the market; and

(c) the clients of the firm; and

(d) the regulatory system, including any recent, or reasonably expected, changes to it; and

(e) the qualifications that may be required for the function.

Note For competencies for controlled functions, see rule 4A.2.3 and the guidance following that rule.

(2) In deciding whether a qualification that is not specified in schedule 1 or schedule 2 nevertheless meets the knowledge element for the role to be performed by an individual, an authorised firm must have regard to qualifications recognised as appropriate for the role by another regulator (for example, the Financial Services Authority (UK), the Australian Securities and Investments Commission, the New Zealand Securities Commission, the Financial Industry Regulatory Authority (US), the Securities and Futures Commission (Hong Kong) or the Monetary Authority of Singapore).

Note In the United Kingdom, many of the recognised qualifications for various functions related to financial services are to be found in the Training and Competence Sourcebook published by the Financial Services Authority.

(3) This rule does not limit the matters to which the authorised firm may have regard in making its decision.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.2.3 Competencies
(1) The competencies for a controlled function are the combination of the elements of skills, knowledge and experience that make an individual competent to perform the function.

(2) Schedule 1 sets out a non-exhaustive list of the competencies that individuals are expected to have for effective performance of controlled functions (other than the customer facing function).

(3) Schedule 2 sets out a non-exhaustive list of the competencies that individuals are expected to have for effective performance of the customer facing function.

(4) The extent of the application of the competencies in schedule 1 and schedule 2 in relation to a particular individual and a particular firm depends on the nature and complexity of the individual's role in the firm and the regulated activity or activities to be conducted by the individual.

(5) As a general rule, individuals who will be performing the following controlled functions must have the regulatory or technical qualifications set out as knowledge competencies in schedule 1 and schedule 2 before they can be approved:
(a) compliance oversight function;

(b) risk management function;

(c) finance function;

(d) MLRO function;

(e) actuarial function;

(f) customer facing function with retail customers.

Examples for subrule (4)

1 An individual seeking to be approved to perform the compliance oversight function for a firm engaged in limited regulated activities need not necessarily have all the skills set out in rules S4.1 to S4.13 of Schedule 1. In contrast, an approved individual performing the compliance oversight function for a firm engaged in complex regulated activities is expected to have all or most of those skills.

2 An individual seeking approval to perform solely the role of insurance adviser performing the customer facing function in relation to motor vehicle policies need only be assessed for skills, knowledge and experience required for that limited role in the firm.

Guidance for rule 4A.2.3

1 The 3 competency elements against which an individual is to be assessed as competent or not are the individual's—
(a) skills (what the individual ought to be able to do); and

(b) knowledge (what the individual ought to know or to have by way of qualifications); and

(c) experience (what the individual has previously done, if anything).

2 The 3 competency elements are to be used in making assessments under rule 4A.2.2 (How competency assessment made by firms), rule 4A.3.3 (How competency decided by Regulatory Authority), rule 4A.3.5 (Eligibility to continue to be approved) and rule 4A.4.2 (Conditional approval—individuals likely to acquire competencies for customer facing function within 12 months).

3 An authorised firm and the Regulatory Authority must decide (taking into account the circumstances of each case, the matters in rule 4A.2.2 and rule 4A.3.3 and the role of the individual) whether it is satisfied that the individual has the competencies required to perform the controlled function for the firm.

4 Under subrule 4A.2.3(5), there are certain knowledge competencies that an individual must have before the individual can be approved by the Regulatory Authority (for example, regulatory or technical qualifications required for individuals who will be dealing with retail customers).

5 The following are indicative examples of appropriate levels of experience that may be used by a firm undertaking a competency assessment under rule 4A.2.2:
•   for a junior role in the firm—up to 2 years experience performing the function or a similar role

•   for a mid level role in the firm—more than 2 years and up to 10 years experience

•   for a senior role in the firm—more than 10 years experience.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.2.4 How fitness assessment made by firms
(1) In deciding whether it is satisfied that an individual is a fit and proper person to perform a controlled function, an authorised firm must have regard to—
(a) the individual's honesty, integrity and reputation; and

(b) the individual's financial soundness.

(2) For paragraph (1) (a), the authorised firm must take into account the following matters about the individual's honesty, integrity and reputation:
(a) any past, ongoing or pending legal proceedings, whether civil or criminal, relating to or involving the individual;

(b) any investigation undertaken, disciplinary action taken, or sanctions imposed, in relation to or on the individual by a court, tribunal, regulatory or governmental agency, body or authority, exchange, clearing house, self-regulatory body or other professional body;

(c) any complaint against the individual relating to, or any contravention by or involving the individual of, any financial services legislation (including any regulations, rules, statements of principle or codes of practice made by an exchange, clearing house, self-regulatory body or other professional body);

(d) any complaint made about the individual's standard of conduct in relation to activities subject to regulation inside or outside the QFC;

(e) the individual's involvement with any business that—
(i) was wound up or put into liquidation, placed in receivership or administration, ceased trading, negotiated a settlement with creditors, or became insolvent—
(A) while the individual was involved with the business; or

(B) within 1 year after that involvement ended; or

(ii) had any approval, authority, licence, registration or other permission to conduct business removed, restricted or suspended; or

(iii) has been refused any approval, authority, licence, registration or other permission to conduct business; or

(iv) has been expelled by any regulatory or governmental agency, body or authority; or

(v) has been investigated, criticised, disciplined, censured or suspended by any regulator, professional body or tribunal, whether publicly or privately;

(f) whether the individual has been dismissed, or asked to resign and has resigned, from a position of trust or fiduciary appointment;

(g) the effect that the individual's reputation may have on the authorised firm and the QFC;

(h) whether the individual has been candid and truthful in dealing with the authority.

(3) For paragraph (1) (b), the authorised firm must take into account the following matters about the individual's financial soundness:
(a) whether the individual is able to pay debts as they fall due;

(b) any arrangement made by the individual with creditors;

(c) whether the individual has filed for bankruptcy, been served with any bankruptcy petition or been subject to any bankruptcy order;

(d) whether the individual has had assets seized, confiscated or frozen.

(4) This rule does not limit the matters the authorised firm may take into account in having regard to the individual's honesty, integrity, reputation and financial soundness.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.3 Approval of individuals for controlled functions

INDI 4A.3.1 Application—individuals with required competencies
If an authorised firm is satisfied under rule 4A.2.1 (Initial competency and fitness assessments by firms) that the individual has the competencies required to perform 1 or more controlled functions, the firm may apply to the Regulatory Authority for approval of the individual to perform the function or functions for the firm.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.3.2 Eligibility for approval of individuals—general
An individual is eligible to be approved by the Regulatory Authority to perform 1 or more controlled functions for an authorised firm only if the firm demonstrates to the authority's satisfaction that the individual—

(a) has the competencies required to perform each function; and

(b) is a fit and proper person to perform each function; and

(c) satisfies any additional requirements under these or any other Rules for each function.

Note 1 Section 2.2 of these rules sets out additional requirements for particular controlled functions.

Note 2 For conditional approval of individuals (to perform a customer facing function) who are not eligible under this rule, see Part 4A.4.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.3.3 How competency decided by Regulatory Authority
In deciding whether it is satisfied than an individual has the competencies required to perform a controlled function for an authorised firm, the Regulatory Authority may have regard to matters that the authority considers relevant, including the matters in subrule 4A.2.2(1).

Note For competencies for controlled functions, see rule 4A.2.3 and the guidance following that rule.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.3.4 How decision on fitness and propriety made
(1) In deciding whether it is satisfied that an individual is a fit and proper person to be approved to perform a controlled function for an authorised firm, the Regulatory Authority may have regard to the following:
(a) the individual's honesty, integrity and reputation;

(b) the individual's financial soundness;

(c) any other matter that the authority considers relevant.

(2) For paragraph (1) (a), the Regulatory Authority may take into account matters about the individual's honesty, integrity and reputation that the authority considers relevant, including the matters in subrule 4A.2.4(2).

(3) For paragraph (1) (b), the Regulatory Authority may take into account matters about the individual's financial soundness that the authority considers relevant, including the matters in subrule 4A.2.4(3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.3.5 Eligibility to continue to be approved
An approved individual is eligible to continue to be approved by the Regulatory Authority to perform 1 or more controlled functions for an authorised firm only if the firm can demonstrate on an ongoing basis to the authority's satisfaction that—

(a) the individual has the competencies required to perform each function; and

(b) the individual is a fit and proper person to perform each function; and

(c) the individual satisfies any additional requirements under these or any other Rules for each function.

Note For competencies for controlled functions, see rule 4A.2.3 and the guidance following that rule.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.4 Conditional approval of individuals for customer facing function

INDI 4A.4.1 Application—individuals likely to acquire competencies for customer facing function within 12 months
Despite rule 4A.2.1 (Initial competency and fitness assessments by firms), an authorised firm may apply to the Regulatory Authority for approval of an individual to perform the customer facing function even if the individual does not have the competencies required for that function, if—

(a) the firm is satisfied that, if approved, the individual would acquire the competencies within 12 months after the conditional approval; and

(b) the firm can ensure that, until the individual has acquired the competencies, the individual will be appropriately supervised while performing the function.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.4.2 Conditional approval—individuals likely to acquire competencies for customer facing function within 12 months
(1) An individual for whom an authorised firm has made an application under rule 4A.4.1 is eligible to be approved by the Regulatory Authority to perform the customer facing function for the firm only if—
(a) the firm has stated in the application that it is satisfied that—
(i) if approved, the individual would acquire the competencies required to perform the function within 12 months after the conditional approval (the 12 month period); and

(ii) until the individual has acquired the competencies, it can ensure that the individual will be appropriately supervised while performing the function; and

(b) the firm demonstrates to the authority's satisfaction that the individual—
(i) is a fit and proper person to perform the customer facing function; and

(ii) satisfies any additional requirements under these or any other Rules for the function.

(2) If the Regulatory Authority decides to approve the individual to perform the customer facing function for the authorised firm, the approval (the conditional approval) is subject to the condition that the individual will cease to be approved to perform the customer facing function if—
(a) the individual ceases to be a fit and proper person; or

(b) the firm is unable to appropriately supervise the individual; or

(c) the individual ceases to satisfy any additional requirements prescribed under these or any other Rules for the function; or

(d) the 12 month period has ended, unless the firm notifies the Regulatory Authority under subrule (3) that it has made a decision about the individual.

(3) If an individual is given a conditional approval and the authorised firm decides before the end of the 12 month period that it is satisfied that the individual has acquired the competencies required to perform the customer facing function, the firm must immediately notify the Regulatory Authority about its decision.

Note See rule 4A.2.2 (How competency assessment made by firms).

(4) A notification under subrule (3)—
(a) must state the reasons for the decision and the matters to which the authorised firm had regard, and took into account, in making the decision; and

(b) must be accompanied by documentary evidence (if any) in support of the decision.

Note Under the General Rules 2005, rule 5.1.1, communications to the Regulatory Authority must generally be in writing, unless the authority requires or permits the communication to be made to it in another way (for example, using approved forms (see rule 5.3.1) or the electronic submission system established by the authority (see rule 5.4.1)).

(5) If the Regulatory Authority receives notification under subrule (3), the authority must, within 20 business days after it received the notification, give written notice to the firm—
(a) that—
(i) the authority agrees with the decision of the firm; and

(ii) the conditions attached to the individual's conditional approval cease to have effect; and

(iii) the individual continues to be an approved individual; or

(b) that the authority is not satisfied that the individual has the competencies required to perform the function and the conditional approval of the individual continues to have effect in accordance with its terms for the remainder of the 12 month period for which it was granted; or

(c) that the firm give any additional statement, explanation, document or further information that the authority considers necessary or desirable to enable it give the notice under paragraph (a) or (b).

Note For competencies for the customer facing function, see schedule 2. See also rule 4A.2.3 and guidance after that rule.

(6) A notice under subrule (5) (b) must include the reasons why the Regulatory Authority is not satisfied that the individual has the competencies required to perform the function.

(7) Nothing in this rule prevents a firm from—
(a) giving, during the 12 month period, more than 1 notification under subrule (3) in relation to an individual; or

(b) making another application on behalf of an individual who has been given a conditional approval if the individual fails to acquire the competencies required to perform the customer facing function within the 12 month period.

Note Under FSR, article 46 (1) (d), the Regulatory Authority may also exercise other powers or steps if an approved individual, or the authorised firm in respect of which the approved individual is approved, breaches a condition, restriction or requirement applicable to the approval.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 4A.4.3 What constitures appropriate supervision?
(1) Subject to subrule (2), an individual performing a controlled function is appropriately supervised if—
(a) the individual is supervised by another individual (the supervisor)—
(i) who is approved under Part 4A.3 to perform the controlled function for the firm; or

(ii) who is approved under Part 4A.3 to perform the compliance oversight function for the firm; and

(b) the firm is satisfied that the supervisor has the ability to supervise, train, coach and mentor the individual; and

(c) the supervisor considers the individual's needs, experience, skills, abilities, role and level in the firm when determining the degree of supervision required by the individual.

(2) An individual approved to perform the customer facing function who is conducting the relevant regulated activity with a customer is appropriately supervised only if—
(a) the individual is supervised by another individual (the supervisor)—
(i) who is approved under Part 4A.3 to perform the customer facing function for the firm; and

(ii) who has the same, or broader, scope of approval; and

(b) the firm is satisfied that the supervisor has the ability to supervise, train, coach and mentor the individual; and

(c) the supervisor considers the individual's needs, experience, skills, abilities, role and level in the firm when determining the degree of supervision required by the individual.

Examples of variations in degree of supervision of individuals conditionally approved under rule 4A.4.2

1 An individual who has just obtained regulatory or technical qualifications but does not have experience appropriate for advising on investments will require intensive supervision when performing customer facing functions.

2 An individual who is working towards obtaining regulatory or technical qualifications and has experience appropriate for advising on investments will need a lower degree of supervision compared to the individual described in example 1.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5 Training and other ongoing obligations relating to controlled functions
Notes for chapter 5

1 Principle 4 (see rule 4.1.4) requires an authorised firm to ensure that individuals performing controlled functions receive or undertake sufficient training and continuing professional development.

2 Principle 5 (see rule 4.1.5) requires an authorised firm to be able to provide documentary evidence of its compliance with the requirements relating to training and competency of individuals performing controlled functions.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.1 Suitability and Competence [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.1.5 [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.1.1 Obligation to review competencies
(1) An authorised firm must, from time to time in accordance with its training and competency document, ensure that each approved individual for the firm—
(a) continues to have the competencies required to perform the controlled function or functions that the individual is approved to perform; and

(b) continues to be a fit and proper person to perform each function.

(2) The following rules apply to an authorised firm in deciding whether an individual continues to have the competencies, and continues to be a fit and proper person, to perform each function:
• rule 4A.2.2 (How competency assessment made by firms)

• rule 4A.2.4 (How fitness assessment made by firms).

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.1.2 Obligation to review training and development needs
(1) An authorised firm must, from time to time in accordance with its training and competency document, assess each approved individual's training and development needs.

(2) The interval between assessments of the individual's training and development needs must not be longer than 12 months.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.1.3 Continuing professional development for approved
An authorised firm must ensure that each approved individual for the firm receives sufficient continuing professional development appropriate to the nature and complexity of the individual's role to ensure that the individual continues to have the competencies required to perform the controlled function or functions for which the individual is approved.

Examples of continuing professional development

1 in-house training

2 industry literature review

3 academic studies

4 obtaining professional qualifications

5 technical training for roles that are highly technical or that involve constant changes in legislation or regulatory practice

Note The authorised firm's training and competency document must state its policies and procedures about continuing professional development (see rule 4A.1.3 (2) (c)).

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.1.4 Record keeping—controlled functions
(1) An authorised firm must make the records necessary—
(a) to enable the firm to comply with chapter 4, chapter 4A and this chapter; and

(b) to demonstrate, at all times, that it has complied with chapter 4, chapter 4A and this chapter.

(2) Without limiting subrule (1), the authorised firm must make a record of how it made each decision about an individual, including, for example—
(a) the inquiries that it made before making the decision, the dates it made the inquiries and the results of those inquiries; and

(b) the matters to which it had regard and took into account in making the decision; and

(c) the provisions of Rules and guidance that it considered or complied with in making the decision, and, if appropriate, how it complied with the Rules; and

(d) the decision, the date it was made and the reasons for the decision.

(3) Records made by the authorised firm must be kept by the firm for at least 6 years after the day they are made.

(4) However, records made for subrule (2) about an individual who is (or has been) an approved individual must be kept by the authorised firm for at least 6 years after the day the individual ceases (or ceased) to be an approved individual.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.2 Training and Supervision [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

Continuing Competence [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.2.1 [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.2.2 [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.2.3 [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.3 Record Keeping [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 5.3.1 [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 6 Performance of Controlled Functions

INDI 6.1 Multiple Appointments

INDI 6.1.1
An individual may carry on Controlled Functions for more than one Authorised Firm provided that:

(A) each such Authorised Firm confirms to the Regulatory Authority:
(i) that it is aware of the Controlled Functions which that individual carries out for any other Authorised Firm; and

(ii) that it is satisfied that no conflict of interest will arise from the performance by that individual of those Controlled Functions for such other Authorised Firm; and

(B) the Regulatory Authority is satisfied that no such conflicts of interest will arise.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 6.1.2
An individual may carry on more than one Controlled Function for an Authorised Firm provided that the Authorised Firm is satisfied that the performance of such Controlled Functions does not give rise to any internal or external conflicts of interest and is appropriate having regard to the nature, scale and complexity of the business carried on by that Authorised Firm.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 6.1.2 Guidance
An individual registered for the Customer Facing Function should not also be registered for the Compliance Oversight Function or any similar control function.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 6.2 Temporary Cover

INDI 6.2.1
An Authorised Firm which is a Non-Local Firm or which is part of wider group of regulated entities, may permit an individual who is an Employee of the Authorised Firm or the Authorised Firm's Group to carry out a Customer Facing Function during one or more occasional visits to the QFC, without requiring such an individual to have Approved Individual status, provided:

(a) the visits do not total more than 45 days in any consecutive 12 months;

(B) the individual is appropriately supervised by the Authorised Firm;

(C) the individual is approved, authorised, licensed or otherwise registered by an Overseas Regulator to undertake an equivalent role for the Authorised Firm or Group;

(d) the authorised firm is satisfied that the individual has the skills and experience, and is a fit and proper person, to perform the customer facing function; and

(E) prior notification is given to the Regulatory Authority.

Amended by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 6.2.2
Where an individual is appointed under INDI Rule 6.2.1 the Regulatory Authority may exercise any powers as it would otherwise be entitled to do, as if the individual held Approved Individual status.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 6.3 Individuals ceasing to exercise controlled functions

Inserted by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 6.3.1
(1) This rule applies if an authorised firm becomes aware that, for any reason, an individual who is an approved individual for the firm is to cease to exercise, or has ceased to exercise, a controlled function for the firm.

(2) The authorised firm must make an application to withdraw the individual's registration to exercise the controlled function for the firm.

(3) The authorised firm must make the application to the Regulatory Authority —
(a) at least 10 business days before the day the individual is to cease to exercise the controlled function for the firm; or

(b) if it is not practicable to make the application to the authority in accordance with paragraph (a) — immediately after the firm becomes aware that the individual is to cease to exercise, or has ceased to exercise, the controlled function, but within 2 business days.

Examples — meaning of 'within 2 business days'

1 If, on a business day, the authorised firm becomes aware that the individual will cease to exercise the controlled function, the firm must make the application immediately, but by no later than the next business day.

2 If, on a day that is not a business day, the authorised firm becomes aware that the individual has ceased to exercise the controlled function, the firm must make the application immediately, but by no later than 2 business days after that day.

Amended by QFCRA RM01/2010 (as from 3rd March 2010).

INDI 7 Principles

INDI 7.1 Principles of Conduct for Approved Individuals

INDI 7.1.1 AI Principle 1 — Integrity
An Approved Individual must act with integrity at all times in the carrying out of Controlled Functions.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 7.1.2 AI Principle 2 — Due Skill, Care and Diligence
An Approved Individual must act with due skill, care and diligence in the carrying out of Controlled Functions.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 7.1.3 AI Principle 3 — Market Conduct
An Approved Individual must observe appropriate standards of market conduct in the carrying out of Controlled Functions.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 7.1.4 AI Principle 4 — Relations with the Regulator
An Approved Individual must deal with the Regulatory Authority in an open and cooperative manner and disclose appropriately to the Regulatory Authority any information of which the Regulatory Authority would reasonably expect notice.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 7.1.5 AI Principle 5 — Management and Compliance
An Approved Individual who is a Senior Manager must give appropriate priority to his management responsibilities and ensure that the business of the Authorised Firm for which he is responsible is effectively supervised and controlled and complies with the relevant requirements of the Regulatory System.

Derived from QFCRA RM03/2005 (as from 13th October 2005).

INDI 8 Transitional provisions (Versions from January 1 2012)

INDI 8.1.1 Approved individuals to remain approved (Versions from January 1, 2012)
A person approved to perform a controlled function before 1 January 2012 whose approval is in effect continues to be an approved individual to perform that controlled function on and after that date.

Note An approved individual before 1 January 2012 continues to be an approved individual and need not re-apply and be re-assessed as competent under the new training and competency rules. However, the individual will be subject to new requirements such as on-going assessment (see rule 4A.3.5) and continuing professional development (see rule 5.1.3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 8.1.2 Applications pending on 31 December 2011 (Versions from January 1, 2012)
(1) An application for approval to perform a controlled function that was filed before, but not yet decided by, 1 January 2012 is to be decided in accordance with the pre-1 January rules.

(2) In this rule:

pre-1 January rules means the provisions on training and competency in chapter 4 (Fitness and Propriety), chapter 5 (Competency, Training and Supervision) and Appendix 1 (Guidance on Fitness and Propriety of Approved Individuals) immediately before 1 January 2012.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

INDI 8 Miscellaneous [Deleted]

Deleted by QFCRA RM/2010-04 (as from 1st October 2010)

INDI 8.1.1 Approved frms to be used [Deleted]
[Deleted]

Deleted by QFCRA RM/2010-04 (as from 1st October 2010)

INDI 8.1.2 Completion of forms [Deleted]
[Deleted]

Deleted by QFCRA RM/2010-04 (as from 1st October 2010)

INDI Schedule 1 Competencies for controlled functions other than customer facing function
(r 4A.2.3(2))

Note 1 The requirements in this schedule are in addition to other requirements prescribed under any other Rules (see, for example, INDI, section 2.2 for senior executive function, compliance oversight function and actuarial function; CTRL, section 4.3 for compliance oversight function, CTRL, section 4.4 for risk management function and AML/CFTR, rule 2.3.2 for MLRO function).

Note 2 The competencies in this schedule are based on the National Occupational Standards (the FSP Standards) prepared by the Financial Skills Partnership (UK). The FSP Standards are used in these rules with, and subject to, the permission of FSP. Copyright of the FSP Standards is vested in FSP and their use or reproduction by any person for any purpose without the written consent of FSP is prohibited.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S1 Senior executive function competencies
Note for part S1

The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on the nature and complexity of the individual's role in the day-to-day activities of the firm (see rule 4A.2.3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S1.1 Skills
S1.1 Assume, alone or with others, overall responsibility for the whole of the business of the firm

S1.2 Exercise critical judgement

S1.3 Plan, lead and implement change

S1.4 Develop the senior management team

S1.5 Manage risk

S1.6 Demonstrate and encourage strategic thinking

S1.7 Exhibit organisational leadership

S1.8 Undertake in an effective manner the fiduciary responsibilities of a member of the governing body of the firm

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S1.2 Knowledge
S1.21 Level of knowledge appropriate for role (which may be demonstrated by having appropriate qualifications)

S1.22 Good knowledge of the principles of sound and effective corporate governance

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S1.3 Experience and other elements
S1.31 Appropriate level of experience and seniority for the role

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S2 Executive governance function competencies
Note for part S2

The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on the nature and complexity of the individual’s role in the day-to-day activities of the firm (see rule 4A.2.3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S2.1 Skills
S2.1 Act as a member of the governing body of the firm with executive responsibility for at least some of the day-to-day direction of its affairs

S2.2 Exercise critical judgement

S2.3 Plan, lead and implement change

S2.4 Develop staff

S2.5 Manage risk

S2.6 Demonstrate and encourage strategic thinking

S2.7 Exhibit organisational leadership

S2.8 Promote compliance culture of the firm

S2.9 Undertake in an effective manner the fiduciary responsibilities of a member of the governing body of the firm

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S2.2 Knowledge
S2.21 Level of knowledge appropriate for role (which may be demonstrated by having appropriate qualifications)

S2.22 Good knowledge of the principles of sound and effective corporate governance

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S2.3 Experience and other elements
S2.31 Appropriate level of experience and seniority for the role

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S3 Non-executive governancefunction competencies
Notes for part S3

1. The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on the nature and complexity of the individual's role in the firm (see rule 4A.2.3).

2. Moreover, the competencies that an individual who is to perform the non-executive governance function is expected to have under this part should reflect the specific role that the individual will perform within the firm. As such, competency assessments for the individual are likely to be less frequent than would otherwise be expected for individuals with roles in the day-to-day activities of the firm. For example, a competency assessment may be met through the individual's participation and assessment in executive coaching, board retreats and planning days, board peer review as well as through membership of other boards and governing bodies.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S3.1 Skills
S3.1 Act as a member of the governing body of the firm, but without responsibility for the day-to-day direction of its affairs

S3.2 Perform the role in a way that demonstrates independence within the governing body of the firm

S3.3 Undertake in an effective manner the fiduciary responsibilities of a member of the governing body of the firm

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S3.2 Knowledge
S3.21 Level of knowledge appropriate for role (which may be demonstrated by having appropriate qualifications)

S3.22 Good knowledge of the principles of sound and effective corporate governance

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S3.3 Experience and other elements
S3.31 Appropriate level of experience and seniority for the role

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S4 Compliance oversight function competencies
Note for part S4

The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on the nature and complexity of the individual’s role in the day-to-day activities of the firm (see rule 4A.2.3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S4.1 Skills
S4.1 Research the firm’s organisation and its requirements to help inform a compliance policy

S4.2 Develop, communicate and implement a compliance policy for the firm

S4.3 Develop and monitor compliance controls in the firm

S4.4 Keep up to date with regulatory developments

S4.5 Support the staff in the firm to maintain compliance and assist the governing body in developing the compliance culture of the firm

S4.6 Write and present compliance reports

S4.7 Consider and advise on the regulatory implications of new business strategies

S4.8 Plan and deliver compliance training

S4.9 Maintain an effective relationship with relevant external bodies and respond to requests on consultations

S4.10 Deal with complaints regarding non-compliance

S4.11 Identify, investigate and resolve non-compliant activity within the firm

S4.12 Inform regulatory bodies of breaches in rules and regulations

S4.13 Develop and monitor the firm’s compliance with its training and competency programme and training and competency document.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S4.2 Knowledge
S4.21 Unless the firm demonstrates to the satisfaction of the Regulatory Authority that the individual does not need the CISI Regulatory qualification (or its equivalent) to perform the role, the individual
must have— (a) the CISI Regulatory qualification; or

(b) any other qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is at least equivalent to the CISI Regulatory qualification.

S4.22 Unless in a particular case the Regulatory Authority requires a qualification that is higher than certificate level, the individual must have—
(a) a recognised compliance oversight function professional qualification that is at certificate level; or

(b) any other qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is appropriate for the role.

Note In satisfying itself for the purposes of this rule, the Regulatory Authority may have regard to qualifications recognised as appropriate for the role by another regulator (for example, the Financial Services Authority (UK), the Australian Securities and Investments Commission, the New Zealand Securities Commission, the Financial Industry Regulatory Authority (US), the Securities and Futures Commission (Hong Kong) or the Monetary Authority of Singapore). Such qualifications may include legal, accounting, audit, risk and other specialised professional qualifications.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S4.3 Experience and other elements
S4.31 Appropriate level of experience and seniority for the role

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S5 Risk management function competencies
Note for part S5

The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on the nature and complexity of the individual’s role in the day-to-day activities of the firm (see rule 4A.2.3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S5.1 Skills
S5.1 Research the firm’s organisation and its requirements to help inform risk strategy and policy

S5.2 Establish risk strategy and policy for the firm

S5.3 Identify, assess and report risk management information to senior management

S5.4 Identify available resources to manage risk for the firm

S5.5 Facilitate risk action planning for the firm

S5.6 Facilitate business continuity planning and disaster recovery for the firm

S5.7 Develop and maintain external third party relationships relevant to risk management in the firm

S5.8 Develop and maintain effective risk management communication within the firm

S5.9 Monitor and evaluate the effectiveness of risk management controls

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S5.2 Knowledge
S5.21 The individual must have—
(a) a recognised risk management function professional qualification; or

(b) any other qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is appropriate for the role.

Note In satisfying itself for the purposes of this rule, the Regulatory Authority may have regard to qualifications recognised as appropriate for the role by another regulator (for example, the Financial Services Authority (UK), the Australian Securities and Investments Commission, the New Zealand Securities Commission, the Financial Industry Regulatory Authority (US), the Securities and Futures Commission (Hong Kong) or the Monetary Authority of Singapore). Such qualifications may include legal, accounting, audit, risk and other specialised professional qualifications.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S5.3 Experience and other elements
S5.31 Appropriate level of experience and seniority for the role

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S6 Finance function competencies
Note for part S6

The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on the nature and complexity of the individual's role in the day-to-day activities of the firm (see rule 4A.2.3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S6.1 Skills
S6.1 Work effectively in or with accountancy and finance to ensure that the firm complies with the Regulatory Authority’s prudential requirements

S6.2 Display high standards of professional ethics in accountancy and finance

S6.3 Ensure that the firm keeps accounting records, financial accounts and statements and auditors’ reports to the standards, and for the periods, required

S6.4 Ensure that the firm has its accounts and financial statements examined, reported, audited and filed in a timely manner and in accordance with applicable standards

S6.5 Review accounting systems

S6.6 Implement external audit procedures

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S6.2 Knowledge
S6.21 The individual must have—
(a) either—
(i) a recognised finance function professional qualification; or

(ii) any other qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is appropriate for the role; and

(b) membership of a finance function professional body

Note In satisfying itself for the purposes of this rule, the Regulatory Authority may have regard to qualifications recognised as appropriate for the role by another regulator (for example, the Financial Services Authority (UK), the Australian Securities and Investments Commission, the New Zealand Securities Commission, the Financial Industry Regulatory Authority (US), the Securities and Futures Commission (Hong Kong) or the Monetary Authority of Singapore). Such qualifications may include accounting, audit, risk and other specialised professional qualifications.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S6.3 Experience and other elements
S6.31 Appropriate level of experience and seniority for the role

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S7 MLRO function competencies
Note for part S7

The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on the nature and complexity of the individual’s role in the day-to-day activities of the firm (see rule 4A.2.3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S7.1 Skills
S7.1 Gather and disseminate information about AML/CFT requirements in the firm

S7.2 Identify the implications of AML/CFT measures for the business conducted by the firm

S7.3 Assess and mitigate the money laundering and terrorist financing risks relevant to the firm

S7.4 Identify improvements to the implementation of AML/CFT measures in the firm

S7.5 Design an AML/CFT programme for the firm

S7.6 Communicate and implement the firm’s AML/CFT policy

S7.7 Assist in developing the compliance culture of the firm

S7.8 Design and oversee procedural controls to monitor money laundering and terrorist financing risks in the firm

S7.9 Report progress in securing AML/CFT outcomes for the firm

S7.10 Assist senior management in ensuring their staff comply with AML/CFT measures

S7.11 Develop and maintain AML/CFT records for the firm (including documentary evidence of compliance, records for customers and transactions, and reporting and training records)

S7.12 Advise and guide staff on AML/CFT

S7.13 Conduct a business risk assessment

S7.14 Plan and deliver AML/CFT training for the firm

S7.15 Respond to requests to contribute to consultations

S7.16 Handle requests for financial information from relevant authorities
S7.17 Design and monitor an internal reporting system for suspicious transactions and activities

S7.18 Identify, investigate and resolve non-compliant activity within the firm

S7.19 Report suspicious financial activity to relevant authorities

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S7.2 Knowledge
S7.21 Unless the firm demonstrates to the satisfaction of the Regulatory Authority that the individual does not need the CISI Regulatory qualification (or its equivalent) to perform the role, the individual must have—
(a) the CISI Regulatory qualification; or

(b) any other qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is at least equivalent to the CISI Regulatory qualification.

S7.22 Unless in a particular case the Regulatory Authority requires a qualification that is higher than certificate level, the individual must have—
(a) a recognised MLRO function professional qualification that is at certificate level; or

(b) any other qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is appropriate for the role.

Note In satisfying itself for the purposes of this rule, the Regulatory Authority may have regard to qualifications recognised as appropriate for the role by another regulator (for example, the Financial Services Authority (UK), the Australian Securities and Investments Commission, the New Zealand Securities Commission, the Financial Industry Regulatory Authority (US), the Securities and Futures Commission (Hong Kong) or the Monetary Authority of Singapore). Such qualifications may include legal, accounting, audit, risk and other specialised professional qualifications.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S7.3 Experience and other elements
S7.31 Appropriate level of experience and seniority for the role

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S8 Senior management function competencies
Note for part S8

The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on the nature and complexity of the individual’s role in the day-to-day activities of the firm (see rule 4A.2.3). Such qualifications may include legal, accounting, audit, risk and other specialised professional qualifications.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S8.1 Skills
S8.1 Manage and supervise, alone or with others, 1 or more elements of the firm’s business relating to its regulated activities (other than as a function in parts S1 to S7)

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S8.2 Knowledge
S8.21 Level of knowledge appropriate for role (which may be demonstrated by having appropriate qualifications)

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S8.3 Experience and other elements
S8.31 Appropriate level of experience and seniority for the role

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S9 Actuarial function competencies
Note for part S9

The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on the nature and complexity of the individual’s role in the day-to-day activities of the firm (see rule 4A.2.3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S9.1 Skills
S9.1 Assume responsibility for monitoring, advising, investigating and reporting on risks facing a firm that is an insurer that materially affect the firm's ability to meet policyholder liabilities and capital requirements

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S9.2 Knowledge
S9.21 The individual must have a recognised actuarial function professional qualification and membership of an actuarial professional body

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S9.3 Experience and other elements
S9.31 At least 5 years experience as an actuary to an insurer that is sufficiently recent to ensure familiarity with current issues in the provision of actuarial services

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

INDI Schedule 2 Competencies for customer facing function
(r 4A.2.3(3))

Note 1 The requirements in this schedule are in addition to other requirements prescribed under any other Rules.

Note 2 The competencies in this schedule are based on the National Occupational Standards (the FSP Standards) prepared by the Financial Skills Partnership (UK). The FSP Standards are used in these rules with, and subject to, the permission of FSP. Copyright of the FSP Standards is vested in FSP and their use or reproduction by any person for any purpose without the written consent of FSP is prohibited.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S1 Customer facing function competencies—general insurance and pure protection contracts
Examples of roles performing this function

1 insurance adviser

2 insurance broker

3 insurance underwriter

Note for part S1

The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on—
(a) the nature and complexity of the individual’s role in the day-to-day activities of the firm; and

(b) the regulated activity or activities to be conducted by the individual (see rule 4A.2.3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S1.1 Skills
S1.1 Identify the customers' insurance needs for general insurance business

S1.2 Gather and validate financial information

S1.3 Analyse customers' financial situation

S1.4 Research and select appropriate insurance solutions to inform recommendations

S1.5 Advise on suitable insurance solutions and agree the next steps

S1.6 Implement insurance solutions

S1.7 Agree insurance policies with customers to enable them to be appropriately insured

S1.8 Process insurance applications

S1.9 Assist customers with claims

S1.10 Evaluate insurance products and services

S1.11 Process insurance business as an intermediary

S1.12 Process insurance renewals as an intermediary

S1.13 Process mid-term insurance amendments

S1.14 Evaluate risk and advise other insurance intermediaries

S1.15 Process insurance policy documentation

S1.16 Underwrite risks

S1.17 Prepare insurance policy documentation for business

S1.18 Process insurance policy alterations

S1.19 Process insurance renewals

S1.20 Review underwriting decisions to accept risks

S1.21 Underwrite policy alterations

S1.22 Deal with requests to cancel insurance products or services

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S1.2 Knowledge

Subdivision S1.2.A Retail customers
S1.31 Unless the firm demonstrates to the satisfaction of the Regulatory Authority that the individual does not need the CISI Regulatory qualification (or its equivalent) to perform the role, the individual must have—
(a) the CISI Regulatory qualification; or

(b) any other qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is at least equivalent to the CISI Regulatory qualification.

S1.32 The individual must have—
(a) the CII Award in General Insurance; or

(b) any other qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is appropriate for the role.

Note In satisfying itself for the purposes of rule S1.31 and S1.32, the Regulatory Authority may have regard to qualifications recognised as appropriate for the role by another regulator (for example, the Financial Services Authority (UK), the Australian Securities and Investments Commission, the New Zealand Securities Commission, the Financial Industry Regulatory Authority (US), the Securities and Futures Commission (Hong Kong) or the Monetary Authority of Singapore). Such qualifications may include legal, accounting, audit, risk and other specialised professional qualifications.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Subdivision S1.2.B Business or commercial customers
S1.35 Level of knowledge appropriate for role (which may be demonstrated by having appropriate qualifications)

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S1.3 Experience and other elements
S1.41 Experience appropriate for the role (unless the individual is being assessed against this element for the purposes of a conditional approval)

Example of exception to rule S1.41

An individual who has recently obtained the CISI Regulatory qualification and CII Award in General Insurance may be conditionally approved under rule 4A.4.2 to exercise (under appropriate supervision) the customer facing function with retail customers despite the lack of experience in the customer facing function for general insurance if the individual will be likely to obtain the appropriate experience competency within 12 months.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S2 Customer facing function competencies—long term insurance contracts and units in collective investment schemes
Examples of roles performing this function

1 financial adviser

2 investment consultant

3 private client investment adviser

4 client service representative or relationship manager

5 institutional sales

Notes for part S2

1 The roles performing this function typically involve the regulated activities of advising on investments and arranging deals in investments.

2 The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on—
(a) the nature and complexity of the individual’s role in the day-to-day activities of the firm; and

(b) the regulated activity or activities to be conducted by the individual (see rule 4A.2.3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S2.1 Skills
S2.1 Engage the customer for financial advice and planning

S2.2 Gather and validate financial information, including—
(a) the customer's financial situation; and

(b) the customer's investment objectives and risk tolerance; and

(c) the customer's knowledge of and experience in the relevant investment field; and

(d) the nature, volume and frequency of the customer's transactions in the investment field and the period over which they have been carried out; and

(e) the customer's level of education and profession or former profession

S2.3 Analyse the customer's financial situation and assess the customer's demands and needs

S2.4 Research and select appropriate financial solutions to inform recommendations

S2.5 Advise on suitable financial solutions and agree the next steps

S2.6 Explain possible disadvantages that a course of action advised might have for the customer, including the nature of the risks involved

S2.7 Implement financial solutions

S2.8 Review and respond to the customer's changing financial needs and circumstances

S2.9 Deal with requests to cancel policies or investments

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S2.2 Knowledge

S2.2.A Retail customers
S2.21 Unless the firm demonstrates to the satisfaction of the Regulatory Authority that the individual does not need the CISI Regulatory qualification (or its equivalent) to perform the role, the individual must have—
(a) the CISI Regulatory qualification; or

(b) any other qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is at least equivalent to the CISI Regulatory qualification.

S2.22 The individual must have—
(a) the CII Award in Financial Planning; or

(b) any other qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is appropriate for the role.

Note In satisfying itself for the purposes of this paragraph, the Regulatory Authority may have regard to qualifications recognised as appropriate for the role by another regulator (for example, the Financial Services Authority (UK), the Australian Securities and Investments Commission, the New Zealand Securities Commission, the Financial Industry Regulatory Authority (US), the Securities and Futures Commission (Hong Kong) or the Monetary Authority of Singapore). Such qualifications may include legal, accounting, audit, risk and other specialised professional qualifications.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Subdivision S2.2.B Business or commercial customers
S2.25 Level of knowledge appropriate for role (which may be demonstrated by having appropriate qualifications)

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S2.3 Experience and other elements
S2.31 Experience appropriate for the role (unless the individual is being assessed against this element for the purposes of a conditional approval)

Example of exception to rule S2.31

An individual who has recently obtained the CISI Regulatory qualification and CII Award in Financial Planning may be conditionally approved under rule 4A.4.2 despite the lack of experience in the customer facing function with retail customers if the individual will be likely to obtain the appropriate experience competency within 12 months.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Part S3 Customer facing function competencies—relevant investments
Note for part S3

The competencies that individuals are expected to have under this part are not exhaustive, and the extent of their application depends on—

(a) the nature and complexity of the individual’s role in the day-to-day activities of the firm; and

(b) the regulated activity or activities to be conducted by the individual (see rule 4A.2.3).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S3.1 Skills

Subdivision S3.1.A Advising on, and arranging deals in,investments (excluding long terminsurance contracts and units incollective investment schemes)

Examples of roles performing this function—advising on investments

1 financial adviser

2 investment strategist

3 private client investment adviser

4 client service representative or relationship manager

5 advising on securities or derivatives

6 institutional sales

7 commodities futures broker

S3.1 Develop an investment strategy to meet agreed investment objectives

S3.2 Analyse the risk and return profile of asset types for customers

S3.3 Construct a risk profile for a proposed portfolio change

S3.4 Make contact with the customers and gather and validate financial information relevant to the securities or derivatives market

S3.5 Follow the initial contact process with customers and engage customers for financial advice and planning

S3.6 Open an account and carry out appropriate administration for customers in securities or derivatives market

S3.7 Establish the investment objectives of customers

S3.8 Analyse the customers' financial situation and assess the customers' demands, needs and investment objectives

S3.9 Research and select appropriate financial solutions to inform recommendations

S3.10 Advise on appropriate financial solutions and agree the next steps

S3.11 Review and respond to the customers' changing financial needs and circumstances

S3.12 Advise customers on investment strategy and investment selection

S3.13 Monitor individual portfolio performance using appropriate comparators

S3.14 Prepare investment recommendations for re-structuring an individual or corporate portfolio

S3.15 Report to customers on investment performance

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Subdivision S3.1.B Managing investments

Examples of roles performing this function—managing investments

1 private client asset management

2 discretionary and specialised portfolio management

3 asset manager

4 investment manager

5 institutional asset manager

6 investment banker working in asset management

7 portfolio manager

S3.21 Develop an investment strategy to meet agreed investment objectives

S3.22 Implement a defined investment strategy

S3.23 Analyse the risk and return profile of asset types

S3.24 Construct a risk profile for a proposed portfolio change

S3.25 Make contact with the customers and gather and validate financial information relevant to the securities or derivatives market

S3.26 Monitor individual portfolio performance using appropriate comparators

S3.27 Review and re-structure an individual or corporate portfolio

S3.28 Establish and operate individual or corporate investment portfolio performance monitoring procedures

S3.29 Report to customers on investment performance

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Subdivision S3.1.C Dealing in investments

Examples of roles performing this function—dealing in investments

1 private client stock broker

2 trader in securities, equities, futures or bonds

3 securities underwriter

4 dealing in securities or derivatives

5 commodities futures broker

S3.31 Dealing in investments following receipt of orders or instructions from customers

S3.32 Dealing in investments on the firm's own account

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Subdivision S3.1.D Research and analysis as part ofadvising on investments or otherregulated activities

Examples of roles performing this function—research and analysis

1 corporate finance analyst

2 security or investment analyst

3 derivatives analyst

Guidance for subdivision S3.1.D

Before assessing an individual's research and analytical skills, rule 4A.2.3(4) requires that the regulated activity or activities to be conducted by the individual be taken into consideration in determining the extent of the application of the competencies in this part. If the research and analysis to be performed by the individual are not in relation to a regulated activity (for example, if the research and analysis are for publication in a newspaper article that does not constitute giving advice on investments), then the individual need not be assessed against the competencies in this part. If the individual's research and analysis are part of conducting the regulated activity of advising on investments, then the individual must be assessed against the competencies in this part and approved as an approved individual.

S3.41 Analyse and report implications of sector economics on investments

S3.42 Analyse and report implications of national economics on investments

S3.43 Analyse and report implications of international economics and foreign exchange markets on investments

S3.44 Carry out financial and investment analysis of an individual business

S3.45 Carry out financial and investment analysis of a collective investment scheme

S3.46 Provide equity capital research and analysis support for portfolio management activities

S3.47 Provide fixed interest securities research and analysis support for portfolio management activities

S3.48 Provide research and analysis of alternative investments support for portfolio management activities

S3.49 Provide cash and currencies research and analysis support for portfolio management activities

S3.50 Provide property based markets research and analysis support for portfolio management activities

S3.51 Interpret and analyse a collective investment scheme's objectives and parameters

S3.52 Benchmark a collective investment scheme's performance against investment objectives

S3.53 Review a collective investment scheme portfolio and adjust investments within the scheme's objectives

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S3.2 Knowledge

Subdivision S3.2.A Retail customers
S3.61 Unless the firm demonstrates to the satisfaction of the Regulatory Authority that the individual does not need a CISI Regulatory qualification (or its equivalent) to perform the role, the individual must have—
(a) the CISI Regulatory qualification; or

(b) any other qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is at least equivalent to the CISI Regulatory qualification.

S3.62 The individual must have a qualification that the Regulatory Authority is satisfied (on the basis of evidence produced by the firm if the Regulatory Authority so requires) is appropriate for the role.

Note In satisfying itself for the purposes of this rule, the Regulatory Authority may have regard to qualifications recognised as appropriate for the role by another regulator (for example, the Financial Services Authority (UK), the Australian Securities and Investments Commission, the New Zealand Securities Commission, the Financial Industry Regulatory Authority (US), the Securities and Futures Commission (Hong Kong) or the Monetary Authority of Singapore). Such qualifications may include legal, accounting, audit, risk and other specialised professional qualifications.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Subdivision S3.2.B Business or commercial customer
S3.65 Level of knowledge appropriate for role (which may be demonstrated by having appropriate qualifications)

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

Division S3.3 Experience and other elements
S3.71 Experience appropriate for the role (unless the individual is being assessed against this element for the purposes of a conditional approval)

Example of exception to rule S3.71

An individual who has recently obtained the CISI Regulatory qualification and the appropriate technical qualifications may be conditionally approved under rule 4A.4.2 despite the lack of experience in the customer facing function with retail customers if the individual will be likely to obtain the appropriate experience competency within 12 months.

Inserted by QFCRA RM/2011-5 (as from 1st January 2012), substituting Appendix 1.

INDI App 1 Guidance on Fitness and Propriety of Approved Individuals [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012) and substituted by Schedules 1 and 2.

INDI App 1 Guidance [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012) and substituted by Schedules 1 and 2.

INDI A1.1 Honesty, Integrity and Reputation [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012) and substituted by Schedules 1 and 2.

INDI A1.1 Guidance [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012) and substituted by Schedules 1 and 2.

INDI A1.2 Competence and Capability [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012) and substituted by Schedules 1 and 2.

INDI A1.2 Guidance [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012) and substituted by Schedules 1 and 2.

INDI A1.3 Financial Soundness [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012) and substituted by Schedules 1 and 2.

INDI A1.3 Guidance [deleted]

Deleted by QFCRA RM/2011-5 (as from 1st January 2012) and substituted by Schedules 1 and 2.

Glossary
(r 1.1.2)

appropriately supervised, in relation to an individual, has the meaning given by rule 4A.4.3.

approved individual means an individual approved under the FSR, article 41 to perform 1 or more controlled functions.

authorisation means an authorisation granted under the Financial Services Regulations, part 5.

authorised firm (or firm) means a person that has an authorisation.

CII Award in General Insurance means the award (AGI) for passing the examination given by the Chartered Insurance Institute on general insurance, as revised from time to time; or

CII Award in Financial Planning (AFP) means the award for passing the examination given by the Chartered Insurance Institute on financial planning, as revised from time to time.

CISI Regulatory qualification means the award for passing the examination on the QFC Rules and Regulations, developed by the Regulatory Authority in conjunction with the Chartered Institute for Securities and Investments, as revised from time to time.

competencies, for a controlled function, has the meaning given by rule 4A.2.3.

conditional approval means an approval under rule 4A.4.2.

controlled function has the meaning given by the FSR, article 41(2).

customer facing function has the meaning given by rule 2.1.10.

document means a record of information in any form (including electronic form), and includes, for example—

(a) anything in writing or on which there is writing; and

(b) anything on which there are figures, marks, numbers, perforations, symbols or anything else having a meaning for individuals qualified to interpret them; and

(c) a drawing, map, photograph or plan; and

(d) any other item or matter (in whatever form) that is, or could reasonably be considered to be, a record of information.

FSR means the QFC Financial Services Regulations 2005.

INAP means the Interpretation and Application Rulebook.

month means calendar month.

QFC means the Qatar Financial Centre.

regulated activity means an activity that is a regulated activity under the Financial Services Regulations.

Regulatory Authority means the Regulatory Authority of the QFC.

senior management, of an authorised firm, means the firm's senior managers, jointly and separately.

senior manager, of an authorised firm, means an individual employed by the firm or a member of the firm's group who has responsibility either alone or with others for management and supervision of 1 or more elements of a firm's business relating to regulated activities.

training and competency programme means the programme required under rule 4A.1.1.

training and competency document means the document required under rule 4A.1.3.

writing means any form of writing, and includes, for example, any way of representing or reproducing words, numbers, symbols or anything else in legible form (for example, by printing or photocopying).

Inserted by QFCRA RM/2011-5 (as from 1st January 2012).

Endnotes

1 Abbreviation key

a = after	om = omitted/repealed
am = amended	orig = original
amdt = amendment	par = paragraph/subparagraph
app = appendix	prev = previously
art = article	pt = part
att = attachment	r = rule/subrule
b = before	renum = renumbered
ch = chapter	reloc = relocated
def = definition	s = section
div = division	sch = schedule
g = guidance	sdiv = subdivision
hdg = heading	sub = substituted
ins = inserted/added

2 Rulebook history

Individuals Rulebook (INDI)

made by

Individuals Rulebook Rule Making Instrument No. 3, 2005 (RM03/2005)
Made: 13 October 2005
Commenced: 13 October 2005
Version: INDI-VER1-Oct05

as amended by

Prudential–Insurance Rulebook Rule Making Instrument No. 2006/01 (RM2006/01 annex C)
Made: 5 September 2006
Commenced: 1 October 2006
Version: INDI-VER2-Sep06

Conduct of Business Rulebook Rule Making Instrument 2007 (RM2007/01 att E)
Made: 28 June 2007
Commenced: 1 July 2007
Version: INDI-VER3-June07

Rulebooks (Miscellaneous Amendments) Rules 2008 (RM2008/01 sch 2, pt 2.7)
Made: 30 March 2008
Commenced: 7 April 2008
Version: INDI-VER4-Feb08

3 Amendment history

INDI s 2.1 Description of Controlled Functions
INDI r 2.1.11 ins RM2006/01

INDI s 2.2 Additional Requirements for specific Controlled Functions
INDI r 2.2.5 ins RM2006/01

INDI s.2.3 Required Functions
INDI r 2.3.1 sub RM2007/01
INDI r 2.3.3 ins RM2006/01
INDI r 2.3.4 ins RM2006/01
g (a r.2.3.4) ins RM2006/01

INDI s 3.1 Application to register as an Approved Individual
INDI r 3.1.1n ins RM2008/01
INDI r 3.1.2g om RM2008/01

INDI s 3.4 Notification of removal or resignation of Approved Actuary
INDI s 3.4hdg ins RM2006/01
INDI r 3.4.1 ins RM2006/01
INDI r 3.4.2 ins RM2006/01
INDI r 3.4.3 ins RM2006/01

Amended by QFCRA RM01/2008 (as from 7th April 2008).

Individuals Rules 2005 (INDI)

Background to this Rulebook

INDI 1 General provisions

INDI 1.1 Application [deleted]

INDI 1.1.1 Name of rules

INDI 1.1.2 Glossary

INDI 1.1.3 Application of INDI

INDI 2 Controlled Functions

INDI 2 Guidance

INDI 2.1 Description of Controlled Functions

INDI 2.1.1

Senior Executive Function

INDI 2.1.2

INDI 2.1.2 Guidance

Executive Governance Function

INDI 2.1.3

Non-Executive Governance Function

INDI 2.1.4

Compliance Oversight Function

INDI 2.1.5

Risk Management Function

INDI 2.1.6

Finance Function

INDI 2.1.7

MLRO function

INDI 2.1.8

Senior Management Function

INDI 2.1.9

Customer Facing Function

INDI 2.1.10 Customer facing function

Actuarial Function

INDI 2.1.11

INDI 2.2 Additional Requirements for specific Controlled Functions

INDI 2.2.1

INDI 2.2.2 [Deleted]

INDI 2.2.3

INDI 2.2.4

INDI 2.2.5

INDI 2.2.5 Guidance

INDI 2.3 Required Functions

INDI 2.3.1

INDI 2.3.2

INDI 2.3.3

INDI 2.3.4

INDI 2.3.4 Guidance

INDI 2.4 Transitional arrangements

INDI 2.4.1 Transitional arrangements — MLRO function

INDI 2.4.2 Transitional arrangements — MLRO residency

INDI 3 Approved actuaries

INDI 3.1 Application to register as an Approved Individual [Deleted]

INDI 3.1.1 [Deleted]

INDI 3.1.2 [Deleted]

INDI 3.1.2 Guidance [Deleted]

INDI 3.2 Application for modification of Approved Individual status [Deleted]

INDI 3.2.1 [Deleted]

INDI 3.3 Application for withdrawal of Approved Individual status [Deleted]

INDI 3.3.1 [Deleted]

INDI 3.3.2 [Deleted]

INDI 3.3.2 Guidance [Deleted]

INDI 3.3.3 When application to withdraw registration of approved individual must be made [restructured effective 3rd March 2010]

INDI 3.4 [Deleted]

INDI 3.1.1 Insurer to give notice before removal of approved actuary

INDI 3.1.2 Notification by insurer if appointment of approved actuary ends

INDI 3.1.3 Insurer must appoint approved actuary if vacancy arises

INDI 3.1.4

INDI 3.1.4 Guidance

INDI 4 Principles for training and competency

INDI 4.1 Authorised Firm's assessment of Individuals [deleted]

INDI 4.1.1 Principle 1—senior management responsibility

INDI 4.1.2 Principle 2—training and competency programme

INDI 4.1.3 Principle 3—assessment of competencies

INDI 4.1.4 Principle 4—training

INDI 4.1.5 Principle 5—record keeping

INDI 4.2 Regulatory Authority's assessment of Individuals [deleted]

INDI 4.2.1 [deleted]

INDI 4.2.2 [deleted]

INDI 4.3 Honesty, Integrity and Reputation [deleted]

INDI 4.3.1 [deleted]

INDI 4.4 Competence and Capability [deleted]

INDI 4.4.1 [deleted]