Top questions on Minimum Competency Code (MCC) requirements for credit union staff
From 1 October 2024 changes to the Central Bank of Ireland’s Minimum Competency Code will come into effect for certain credit union staff. This will mean that any individual who carries out certain activities that fall within the scope of the MCC requirements will become bound by the regulations.
Ahead of the upcoming change in regulatory requirements, we answer some of the most popular questions on MCC and how credit union professionals can meet the requirements.
Minimum Competency Code Explained
What is the Minimum Competency Code?
The Minimum Competency Code (MCC) sets out the minimum professional standards for any person providing certain financial services, in particular when dealing with consumers. The aim is to ensure that consumers obtain a minimum level of competence when an individual acting for or on behalf of regulated financial services firms is providing advice, information and associated activities in connection with retail financial products.
When does the MCC requirement apply to credit union staff, directors and volunteers?
The MCC already applies to individuals who are arranging or advising on housing loans, devising and developing housing loan products and acting as retail intermediaries (i.e. arranging or advising on insurance products).
The MCC has been extended to apply to those who work in a Controlled Function (CF) to all services within scope of the Minimum Competency Code that credit unions may offer or provide to their members. This will apply from 1 October 2024.
When must people performing in-scope activities be qualified by?
Qualification must be achieved by 1 October 2028. However, any individuals working in a controlled function must be working towards qualification from 1 October 2024.
In Scope and Roles:
What are In-Scope activities under the MCC?
MCC applies to those who are in a controlled function on a professional basis. A controlled function includes:
Providing advice or information to consumers on retail financial products – (such as housing loans, consumer Credit and associated insurances, savings and investments. Savings and investments include deposits with a term of greater than one year and MiFID products.
Arranging or offering to arrange retail financial products for consumers
Adjudicating on complaints on retail financial products
What is a retail financial product?
A retail financial product is one which falls under the following categories:
MCC Category 1 - Life Assurance
MCC Category 2 - Pensions
MCC Category 3 -Savings and Investments
MCC Category 4 - Personal General Insurance
MCC Category 5 - Commercial General Insurance
MCC Category 6 - Private Medical Insurance and Associated Insurances
MCC Category 7 - Mortgage Credit Agreements, Housing Loans, Home Reversion Agreements and Associated Insurance
MCC Category 8 - Consumer Credit Agreements and Associated Insurances
What are the Controlled Functions (CFs) relevant to credit unions?
Six new Controlled Functions (CF) have been introduced for Credit union staff which will bring staff involved in these activities in Scope for becoming qualified under the MCC.
| CF Name | In-Scope Activity |
|---|---|
| CUCF – 3 | Giving advice to a member of a credit union, in the course of providing, or in relation to the provision of the financial service |
| CUCF – 4 | Arranging, or offering to arrange, a financial service for a member of a credit union |
| CUCF – 5 | Assisting a member of a credit union in the making of a claim under a contract of insurance or reinsurance |
| CUCF – 6 | Determining the outcome of a claim arising under a contract of insurance or reinsurance |
| CUCF - 7 | Acting in the direct management or supervision of those persons who act for a credit union in providing the services relevant to CUCF 3 – CUCF 6 |
| CUCF - 8 | Adjudicating on any complaint communicated to a credit union by a member in relation to the provision of a financial service |
If I am working in a Controlled Function, what must I do now?
Any staff member who is in a controlled function (for example, arranging or providing advice on retail financial products) must become qualified as an Accredited Product Advisor (APA) or Qualified Financial Advisor (QFA).
Qualification can be achieved by enrolling on either IOB’s Professional Certificate or Professional Diploma in Financial Advice and completing the modules related to your role.
Transitional arrangements will apply for those who have not yet achieved qualification, provided an individual is working towards qualification and registers for the first available sitting of the programme / module when they could be reasonably be expected to sit the relevant exam.
What qualification do I need for my role?
IOB provides a route to qualification through the relevant programmes for MCC categories 1, 2, 3, 7 and 8 (outlined below) and following completion of your education programme will invite you to the relevant designation to fulfil the requirements for your role as a controlled function under the MCC.
Your role will determine the qualification that you need to hold. You may need to become an Accredited Product Advisor (APA) in a particular category (outlined below) or a Qualified Financial Advisor (QFA) if you hope to become a designate in all the MCC Categories outlined below.
| MCC No. | MCC Category Title |
|---|---|
| MCC 1 | Life Assurance |
| MCC 2 | Pensions |
| MCC 3 | Savings and Investments |
| MCC 7 | Mortgage Credit Agreements, Housing Loans, Home Reversion Agreements and Associated Insurance |
| MCC 8 | Consumer Credit Agreements and Associated Insurances |
The programmes which can satisfy the educational requirements of the MCC and will allow you to become eligible for the designation required include:
The Professional Certificate in Financial Advice
The Professional Diploma in Financial Advice
The Professional Certificate in Consumer Credit
Does the requirement to hold an MCC designation apply to Credit union Directors?
MCC will apply to any Directors who are performing any in-scope activities as outlined in the Minimum Competency Code – i.e. arranging or advising on retail financial products.
Does the requirement to hold an MCC designation apply to Credit union Volunteers?
MCC applies to volunteers who are performing any in-scope activities as outlined in the Minimum Competency Code – i.e. arranging or advising on retail financial products.
Does the requirement to hold an MCC designation apply if I am working in a Risk or Compliance role?
If you work in a Risk or Compliance role and also providing advice on, or arranging retail financial products, then qualification is required under the MCC.
Qualification is also required if you adjudicate on any complaints related to the retail financial services covered by the MCC.
If you adjudicate on complaints, then the IOB programmes - the Professional Certificate in Compliance or the Professional Diploma in Compliance will also be accepted as relevant programmes for MCC purposes for this regulated activity only.
Getting Qualified:
How do I become an APA in a particular category?
Successful completion of the Professional Certificate in Financial Advice will make you eligible to be invited to the APA designation for the relevant category you have qualified in. The Professional Certificate in Financial Advice comprises of a minimum of two and a maximum of five modules: Regulation and at least one other module from Loans, Investment, Life Assurance and Pensions. Once Regulation and at least one of the category modules has been successfully completed you will be invited to take out the APA Designation for that category.
How do I become a QFA?
Successful completion of the Professional Diploma in Financial Advice will make you eligible to be invited to the QFA designation. The Professional Diploma in Financial Advice has six modules in total, all of which must be completed to be eligible for invitation to take up the QFA designation. Graduates of this programme with IOB will also be invited to receive the European Financial Advisor (EFA) designation.
Read our guide answering top questions on becoming a QFA here.
Is it possible to become an APA in Consumer Credit Only?
It is possible to become an APA in Consumer Credit only by undertaking the Professional Certificate in Consumer Credit. This is a standalone programme which covers the competencies required in order to advise on or arrange consumer credit products – i.e. Personal loans, Hire Purchase etc.
Please note that this programme does not lead to an APA in Loans and if you wish to advise on or arrange Housing Loans you will need to complete the Professional Certificate in Financial Advice (taking Loans and Regulation at a minimum. On successful completion of both the Loans and Regulation modules you will be invited to become an APA in both Housing Loans and Consumer Credit and Associated Insurances.
Does IOB offer exemptions for previously completed programmes?
Certain programmes previously completed by credit union staff may offer exemptions towards some modules of the Professional Certificate / Diploma in Financial Advice.
If you have any queries on these please email the dedicated programme manager at [email protected]
