The current risk assessment process undertaken by the FCA informs its judgement of the risk that a firm poses to its statutory objectives. The successor regulators to the FCA will replace the FCA ARROW process with a new risk assessment process.
However, a regulatory assessment will continue to determine the intensity of regulatory engagement as well as determine what remedial actions a firm is expected to undertake. It is essential that firms understand the process, and manage their risk and compliance arrangements in such a way to give confidence to the regulator that the business is run in a well-controlled fashion.
The assessment is far wider than compliance arrangements and seeks to engage senior management with all the key risks faced by the firm. This can be daunting for firms, particularly if they have not experienced the risk assessment process before. Even firms who have experienced a risk assessment will find the intensity of supervision by the FCA and successor regulators increasing as they continue to expand their supervision capabilities. Many firms, even those who are not yet regularly visited, find great value in engaging Duff & Phelps to undertake a mock visit.
Duff & Phelps employs a significant number of senior regulators who helped develop the original risk methodology, as well as having conducted many risk assessments. The output from our review will be a report which assesses risks, together with recommended actions that we believe would preempt remedial action, likely to be demanded by the regulator if the firm had not undertaken a pre-visit review.
What our clients say:
“[Duff & Phelps] provided exceptional support and guidance and introduced an effective Compliance Risk Assessment process, which has been used to focus and drive our Compliance framework and monitoring arrangements. They also provided invaluable insight on how to structure and escalate key compliance risks and MI to the business by revising the existing Compliance Dashboard and MI pack. [Duff & Phelps] also provided the expertise and project management skills to assist us towards ensuring that our Compliance Manual and associated policies were updated and delivered in a timely and efficient manner. Overall we find [Duff & Phelps] are able to provide highly experienced staff who are pragmatic and able to deliver output of a very high quality. We would have no hesitation in recommending them”. Head of Compliance, European investment bank.