No Firm Too Small For FSA Scrutiny

In a speech to the Association of Professional Compliance Consultants (APCC) on 9 March 2010 (and published later), the Financial Services Authority´s (FSA´s) Head of the Savings and Investments Department, Linda Woodall, emphasised that no firm is too small to avoid the regulator´s supervision and provided an overview of what intensive supervision means for small firms.

Ms Woodall went onto say that "With small firms we are putting together a risk profiler especially for them ‐ we analyse a combination of their financial returns, their regulatory history, intelligence information and what we call environmental issues (meaning their business model and the types of products they sell) and draw conclusions based on their particular set up. This gives us a risk profile of each individual firm. This is the small firms´ version of the ARROW risk assessment system, which you may be familiar with in your larger clients. "So we put in our various data and our profiler will give us a risk score. And we will be able to do that with every one of the 16,000 small firms we cover. At any one time it will be able to give us a snapshot of risky firms, based on whatever parameters we choose to look at. "We can then include those firms in our more intrusive supervisory work, visiting them, asking the tough questions and, if needed, working with them to put things right. With some we will have to take strong action, such as a ban or fine, if the firm is clearly not behaving in the way we expect, and shows no sign of improvement."

She ended her speech with stating key points, "I´d like to leave you with these key messages: First, that despite the difficult operating environment your clients face, they still need to focus on their regulatory responsibilities, with the sustainability of their business, the quality of advice they offer and the standards of management and control they have key. We will focus on these areas. Our assessment programme and initiatives like the RDR and Mortgage Market Review will further push our message of sustainability and reform.

Second, our regulation of small firms is already more intensive and intrusive but it will get even more so. We will be able to put better data to use in a more effective way. No firm will be under our radar so please keep encouraging your clients to work with you on getting the right outcomes for their customers and their business, because we are now even more likely to find them if they don´t."

Read Full Document | Email Feedback

From our experience and with the 2nd anniversary of TCF having been embedded into firms, combined with Ms Woodall's speech above, we thought it a timely reminder that you need to address the TCF actions that you have taken for your firm.

Most compliance providers will supply a TCF form for a price, with any number of questions which you need to consider. This type of form is good for provoking a reaction and making you think of the relevant business area.

We, being alternative thinkers, consider that something relevant to the prescribed and required outcomes from 1 to 6, with a reference to your company documentation, the FSA handbook and ideas on how best to answer the various elements would be more useful..... and hold on, why not do it for free too?

We would welcome any feedback from people using the guide, so that we may refine it. please email feedback@cei-compliance-limited.co.uk

FSA Publishes 2010/2011 Business Plan

The Financial Services Authority (FSA) has published its Business Plan setting out its priorities for 2010/11.

The Plan is a demanding programme of work for the year requiring greater policy and supervisory resources, and focusing on a number of key areas: