The proposals are aimed at increasing standards of professionalism across parts of the industry that do not come under the RDR, including mortgage brokers.
The FSA plans to introduce a 30-month deadline for individuals to complete all the modules of a qualification they are required to have for their work.
The proposals will also remove transitional provisions allowing people to work without formal qualifications, due to arrangements under their previous regulator.
In addition, the proposals clarify how people carrying out approved persons roles should demonstrate a good standard of ethical behaviour, acting in the interests of their clients, avoiding consumer detriment and taking responsibility for their level of competence.
The consultation on the proposals will close on 6 September 2010.
Sheila Nicoll, director of conduct policy for the FSA, said: “Competence and ethics are key elements of our regulatory regime and we have increased our scrutiny of individuals working in the financial services industry over the last few years.
“Ultimately it is in a firm’s commercial interest to recruit, train and retain good quality individuals but regulation ensures that standards of competence and ethics are maintained at an appropriate level.
“We have designed these proposals to enhance consumer protection by strengthening our competence and approved persons requirements. We want to see firms operating robust training and competence schemes and individuals demonstrating good standards of ethical behaviour.”
