Need help in understanding the FCA’s supervision and enforcement methods? - Thistle Initiatives

What is the position?

Do you understand the FCA’s role and what it expects from regulated firms? Put simply, the FCA exists to protect the rights of UK consumers and to protect the integrity of UK financial markets. It does this in four main ways:

Regulating
The FCA supervises the conduct of around 59,000 financial firms, regularly monitoring, assessing and responding to any business model, cultural issue, conduct or behaviour it believes could threaten the industry’s integrity. It also acts as the prudential supervisor for some 49,000 firms.

Protecting
The FCA protects consumers by ensuring that firms adhere to its principles and rules and treat their customers fairly at all times. It also expects firms to take measures to protect themselves against financial crime, including fraud and money laundering.

Championing
The FCA promotes its understanding of what is required to provide better outcomes for customers. Specifically, it believes well-trained staff, unbiased and appropriate advice, and healthy competition between firms are key.

FCA supervision is carried out using a variety of tailored techniques, including a firm assessment model, sector and portfolio reviews, periodic reporting by firms, thematic reviews, skilled persons’ reviews, reviews of complaints and many others.

Enforcement
The FCA has extensive enforcement powers to ensure firms comply with its agenda for protecting consumers’ interests. Enforcement powers include:

• • • • The power to ban investment products, subject to a consultation process. One recent example of this is the recent ban on speculative and illiquid mini-bonds
      • The power to ban investment products that pose a risk to consumers, for a period of up to twelve months, without any consultation, where immediate action is required
      • The power to remove misleading financial promotions immediately from the market without the use of any formal enforcement process
      • The ability to announce publicly that disciplinary action is being taken against a firm or individual, prior to a decision notice being issued (see, for example, the recent case against Commerzbank for its AML failures)
      • The ability to contract directly with skilled persons such as legal or accounting firms where a Section 166 report is required

What do you need to do?

If you have queries about how the FCA supervises you or how you can develop your governance arrangements and effectively manage the regulatory burden, we can advise you on your next steps.

If the FCA intends using its enforcement powers against your firm, we can offer effective enforcement support in all of the following contexts:

• • Interviews under caution
  • Compulsory or voluntary FCA interviews
  • Compulsory requests for documents and information/responses to information requests
  • Searches of your home and/or office
  • Restraint orders and the freezing of company or personal assets
  • Seizure of computers and other electronic devices
  • Hearings before the FCA Regulatory Decisions Committee
  • Hearings before the Upper Tribunal
  • Negotiated settlements and final notices
  • Handling adverse publicity
  • Investigations into breaches of the FCA’s principles and rules
  • Insider dealing and market abuse
  • Perimeter offences (carrying on regulated activities without authorisation or approval)
  • Collective Investment Schemes and Unauthorised Collective Investment Schemes
  • Mis-selling
  • Systems and controls issues
  • The Senior Managers Regime and the SM&CR
  • Senior Manager applications and the fit and proper test
  • Self-reporting

How can we help you?

If you’d like to know more about how we can help with your FCA supervision and enforcement requirements or any other aspect of FCA compliance, our expert team is here to help. Contact us today on 0207 436 0630 – or email info@thistleinitiatives.co.uk.