The FCA’s supervision model, Firm Systematic Framework ("FSF"), undertakes preventative work through structured conduct assessment of firms. This approach can result in the FCA making a visit to the firm. Through the FSF, the FCA will assess how firms manage the risks they create and identify the root causes of what leads to these risks.
For regulated firms, the outcome of a visit by the FCA can have a significant impact on its costs, operations and management time. It is vital that firms effectively manage all aspects of an FCA visit and understand the processes involved.
Preparation is key to ensuring a satisfactory outcome from an FCA visit. Prior to the visit, the firm will need to ensure the robustness, adequacy and effectiveness of its governance structure and to what extent it is proportionate to the nature, scale and complexity of the firm’s activities. You will also be required to provide the FCA with a set of documents for its review prior to the visit.
Depending on the focus of the visit, the firm should prepare for certain questions as well as ensuring all the relevant information is to hand. Should any specific issues arise out of the visit, the firm will need to take steps to implement any necessary recommendations which have been made.
The visit will mainly involve interviewing the firm’s senior employees, including some testing and review of documents. After the visit, the FCA will issue a letter.
Our compliance consultants assist asset managers, brokers, investment banks, corporate finance houses and MTFs in their preparation when a visit from the FCA has been announced.
We have substantial experience in assisting firms in the preparation of FCA visits, including:
- “mock” interviews by experienced compliance consultants
- enhancing and updating procedures; and
- creating operational risk frameworks
We have a number of staff who have previously worked at the FCA, FSA and other regulators, and our frequent work on skilled persons reports gives us insight into the areas and deficiencies upon which the FCA is focusing.