The FCA Doesn't Just Ask Whether Your People Are Competent. It Asks Whether You Can Prove They Were Competent Before They Started Doing Regulated Work.
Under SYSC 3 and the TC Sourcebook, FCA-regulated firms must ensure personnel are appropriate for their roles, adequately trained, and competent before performing regulated functions independently. That obligation doesn't begin at the end of probation. It begins on day one. An employee who starts client-facing work without completed AML training, without FCA Handbook awareness, without documented competence verification, creates a regulatory exposure that exists whether or not anything goes wrong. If something does go wrong — a mis-sale, a suspicious activity not reported, a data breach from an employee who hadn't completed information security training — the FCA's first question is whether appropriate induction procedures were in place and whether they were followed. Under SM&CR, the SMF holder with responsibility for a function owns that question personally. The answer "we had an induction policy" is insufficient. The answer that works is documented evidence: pre-employment regulatory notifications completed, mandatory training modules completed with 80% pass rates, competence assessments signed off by line managers and compliance, checklists dual-signed with date stamps, review meetings conducted at Weeks 1, 2, 4, and 8, records retained for seven years post-termination. This comprehensive Induction Policy gives FCA-regulated firms a complete SYSC and TC Sourcebook-aligned framework that turns the obligation to induct into an evidenced process — covering pre-employment preparation, a structured four-week programme, regulatory and compliance training requirements, role-specific competence assessment, monitoring, disciplinary consequences for non-compliance, and document control.
The gap between "we trained them" and "we can prove they were competent before they started" is where regulatory findings live.
What's included: Full regulatory mapping — SYSC 3 (adequate policies and procedures/staff competence requirements), SYSC 5.1.1R (employment and remuneration practices), TC Sourcebook (competence assessment/supervision/qualification requirements), SM&CR SYSC 24-27 (SMF accountability for competence oversight), FCA Principles for Businesses (PRIN 3: management and control), Health and Safety at Work etc. Act 1974, UK GDPR/DPA 2018 (data protection training obligations/employee data handling), Money Laundering Terrorist Financing and Transfer of Funds Regulations 2017 (mandatory AML training from commencement), COBS/ICOBS/MCOB/CONC/BCOBS (sector-specific training requirements by FCA permissions) · Pre-employment preparation checklist — employment contract with regulatory requirements/FCA regulatory reference checks/criminal record checks per regulatory mandate/professional qualifications verification/UK GDPR confidentiality agreements/conflicts of interest declarations/system access with role-appropriate permissions/multi-factor authentication configuration/regulated activity recording capability where required/FCA individual registration notifications/SM&CR notifications where applicable · Four-week structured programme — Week 1 (Day 1: welcome/IT access/documentation, Days 1-2: health and safety/emergency procedures, Days 2-3: core regulatory training, Days 3-5: conduct risk/conflicts/data protection, Day 5: first review)/Week 2 (department procedures/client protocols/regulatory reporting)/Week 3 (advanced compliance/practical application/experienced colleague shadowing)/Week 4 (supervised independent tasks/final assessments/competence validation) · Mandatory regulatory training modules — FCA Handbook principles and high-level standards/TCF outcomes and Consumer Duty/AML and CTF (CDD/EDD triggers/SAR obligations/sanctions screening/PEP identification/record-keeping)/UK GDPR (data subject rights/lawful bases/breach notification)/information security (phishing/secure data handling/incident reporting)/market conduct/financial crime — all with 80% minimum pass rate/failed assessments require remedial training and re-test within 5 working days · Competence assessment framework — Initial Knowledge Assessment Week 1 (line manager/assessment results record)/Practical Skills Evaluation Weeks 2-3 (line manager and supervisor/skills assessment form)/Competence Validation Week 4 (compliance function/competence certificate) · Review schedule — Week 1 (employee/line manager/HR: immediate concerns/basic understanding confirmation)/Week 2 (employee/line manager: role-specific progress/additional support identification)/Week 4 (employee/line manager/HR: full competence assessment/induction sign-off)/Week 8 (employee/line manager: ongoing development needs/future training plan) — 5-day remedial action window for identified gaps · Induction checklist — dual sign-off (employee signature confirming understanding/line manager signature verifying delivery and competence)/date stamps throughout/incomplete section management/version control references/senior management sign-off for regulatory-critical roles/retention for employment duration plus 7 years post-termination/accessible for FCA supervisory review · Non-compliance disciplinary framework — verbal warning/written warning with mandatory retraining/final written warning with extended probation/suspension pending investigation/termination — with regulatory reporting obligation for serious non-compliance impacting FCA regulatory obligations · Learning and development integration — induction assessment data transferred to appraisal record at programme completion/first formal performance review within 3 months/individual learning and development plan within 4 weeks of induction completion/CPD integration for SMF and certified role holders · Policy governance — SMF compliance holder accountability/Risk and Compliance Committee quarterly review/annual review in Q4/extraordinary review triggers (FCA rule changes/material business model changes/monitoring-identified gaps/significant operational incidents)/5-day staff notification of any policy updates
Built for: Compliance Officers, HR Directors, SMF16 holders, and line managers at FCA-regulated firms who need a complete SYSC and TC Sourcebook-aligned Induction Policy that turns regulatory competence obligations into a documented, auditable, evidenced process — protecting the firm against supervisory findings and ensuring every new starter, contractor, and third-party representative is demonstrably competent before performing regulated functions.
The FCA Doesn't Just Ask Whether Your People Are Competent. It Asks Whether You Can Prove They Were Competent Before They Started Doing Regulated Work.
Under SYSC 3 and the TC Sourcebook, FCA-regulated firms must ensure personnel are appropriate for their roles, adequately trained, and competent before performing regulated functions independently. That obligation doesn't begin at the end of probation. It begins on day one. An employee who starts client-facing work without completed AML training, without FCA Handbook awareness, without documented competence verification, creates a regulatory exposure that exists whether or not anything goes wrong. If something does go wrong — a mis-sale, a suspicious activity not reported, a data breach from an employee who hadn't completed information security training — the FCA's first question is whether appropriate induction procedures were in place and whether they were followed. Under SM&CR, the SMF holder with responsibility for a function owns that question personally. The answer "we had an induction policy" is insufficient. The answer that works is documented evidence: pre-employment regulatory notifications completed, mandatory training modules completed with 80% pass rates, competence assessments signed off by line managers and compliance, checklists dual-signed with date stamps, review meetings conducted at Weeks 1, 2, 4, and 8, records retained for seven years post-termination. This comprehensive Induction Policy gives FCA-regulated firms a complete SYSC and TC Sourcebook-aligned framework that turns the obligation to induct into an evidenced process — covering pre-employment preparation, a structured four-week programme, regulatory and compliance training requirements, role-specific competence assessment, monitoring, disciplinary consequences for non-compliance, and document control.
The gap between "we trained them" and "we can prove they were competent before they started" is where regulatory findings live.
What's included: Full regulatory mapping — SYSC 3 (adequate policies and procedures/staff competence requirements), SYSC 5.1.1R (employment and remuneration practices), TC Sourcebook (competence assessment/supervision/qualification requirements), SM&CR SYSC 24-27 (SMF accountability for competence oversight), FCA Principles for Businesses (PRIN 3: management and control), Health and Safety at Work etc. Act 1974, UK GDPR/DPA 2018 (data protection training obligations/employee data handling), Money Laundering Terrorist Financing and Transfer of Funds Regulations 2017 (mandatory AML training from commencement), COBS/ICOBS/MCOB/CONC/BCOBS (sector-specific training requirements by FCA permissions) · Pre-employment preparation checklist — employment contract with regulatory requirements/FCA regulatory reference checks/criminal record checks per regulatory mandate/professional qualifications verification/UK GDPR confidentiality agreements/conflicts of interest declarations/system access with role-appropriate permissions/multi-factor authentication configuration/regulated activity recording capability where required/FCA individual registration notifications/SM&CR notifications where applicable · Four-week structured programme — Week 1 (Day 1: welcome/IT access/documentation, Days 1-2: health and safety/emergency procedures, Days 2-3: core regulatory training, Days 3-5: conduct risk/conflicts/data protection, Day 5: first review)/Week 2 (department procedures/client protocols/regulatory reporting)/Week 3 (advanced compliance/practical application/experienced colleague shadowing)/Week 4 (supervised independent tasks/final assessments/competence validation) · Mandatory regulatory training modules — FCA Handbook principles and high-level standards/TCF outcomes and Consumer Duty/AML and CTF (CDD/EDD triggers/SAR obligations/sanctions screening/PEP identification/record-keeping)/UK GDPR (data subject rights/lawful bases/breach notification)/information security (phishing/secure data handling/incident reporting)/market conduct/financial crime — all with 80% minimum pass rate/failed assessments require remedial training and re-test within 5 working days · Competence assessment framework — Initial Knowledge Assessment Week 1 (line manager/assessment results record)/Practical Skills Evaluation Weeks 2-3 (line manager and supervisor/skills assessment form)/Competence Validation Week 4 (compliance function/competence certificate) · Review schedule — Week 1 (employee/line manager/HR: immediate concerns/basic understanding confirmation)/Week 2 (employee/line manager: role-specific progress/additional support identification)/Week 4 (employee/line manager/HR: full competence assessment/induction sign-off)/Week 8 (employee/line manager: ongoing development needs/future training plan) — 5-day remedial action window for identified gaps · Induction checklist — dual sign-off (employee signature confirming understanding/line manager signature verifying delivery and competence)/date stamps throughout/incomplete section management/version control references/senior management sign-off for regulatory-critical roles/retention for employment duration plus 7 years post-termination/accessible for FCA supervisory review · Non-compliance disciplinary framework — verbal warning/written warning with mandatory retraining/final written warning with extended probation/suspension pending investigation/termination — with regulatory reporting obligation for serious non-compliance impacting FCA regulatory obligations · Learning and development integration — induction assessment data transferred to appraisal record at programme completion/first formal performance review within 3 months/individual learning and development plan within 4 weeks of induction completion/CPD integration for SMF and certified role holders · Policy governance — SMF compliance holder accountability/Risk and Compliance Committee quarterly review/annual review in Q4/extraordinary review triggers (FCA rule changes/material business model changes/monitoring-identified gaps/significant operational incidents)/5-day staff notification of any policy updates
Built for: Compliance Officers, HR Directors, SMF16 holders, and line managers at FCA-regulated firms who need a complete SYSC and TC Sourcebook-aligned Induction Policy that turns regulatory competence obligations into a documented, auditable, evidenced process — protecting the firm against supervisory findings and ensuring every new starter, contractor, and third-party representative is demonstrably competent before performing regulated functions.
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