Regulatory Visits
ARROW II (or any other regulatory visit) preparation can be daunting and a little intimidating, but what is important to remember is that this is your opportunity to show how effective and professional you are in running your business.
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Methodology
The Key components that the Regulators need answers to are namely;
Identification - What are the risks to the FSA´s Statutory Objectives of: Maintaining confidence in the markets; Public awareness; Consumer confidence, and; Reduction of financial crime?
Measurement - How seriously should the FSA take these risks on a probability v impact basis. This is by using various methods such as file checks, complaints etc.
Control - Implementation of risk management arrangements, defining your risk appetite and mitigation techniques. Since the expansion of the "Common Platform" to encompass most IFAs and brokers this is possibly the most underestimated areas by IFAs and Brokers today.
Assessment - How successful your risk management programme is and whether they can find any holes. This element is becoming more and more prevalent in final notices, quoting breaches of SYSC rules. Efficient risk analaysis, mitigation and management is key to future viability as a regulated business.
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For any Arrow or other regulatory visit (OFT, IC and others as well as FSA) you would normally recieve notice and if not clear in the letter, you should clarify with them mainly;
Check to see if interviewers will allow compliance/Snr Management as observers.
If the timing is not convenient (main holiday period/absence due to sickness etc) it may be possible to reschedule.
Whilst this guide is not exhaustive, it provides a good indication of the main areas and also shows the Hot Topics that you can expect to carry more weight. If you require details on S166 Reports and a costs guideline, please click here
If you have any query at all, Email us at Compliance Consultant NOW!
*** Shows areas where your Professional Compliance Consultant can assist.
Try to ensure that the visitors have a seperate room or office to use (possibly even hire one in adjacent office block or serviced office centre) but use of telephones and other office equipment (even PCs so they can log into your system). It may be prudent to clarify these requirements beforehand. Collate all your documentation as soon as possible. Provide copies (paper or electronic) of your approved financial promotions log, point of sale (POS) documentation, any product provider POS that you may have over branded. Ensure access to your hard copies of financial promotions materials and electronic access for soft copies. ***Make sure your complaints log is up to date and how you have considered and actioned any MI from it. This is a Hot Topic
***Ensure you have a comprehensive risk analysis and risk register available, with documented evidence of actions taken for each issue. Larger firms will have a specific "Regulatory Risks" register as well. This is a Hot Topic
***Policies and procedures should be up to date and evidence of these revisions recorded adequately. Gift & Entertainment log should also be completed and approved accordingly.This is a Hot Topic
***Breach register and FSA contact log needs to be accurate and updated.
***Your Compliance Manual needs to be up to date and reflect the current business model and practices. If you need to get a consolidated and practical manual with over 35 areas covered, it is available from us at our website.This is a Hot Topic
***Evidence of money laundering and compliance manual understanding from all staff? Annual testing and attestations (especially from Approved Persons) goes a long way with regulatory inspectors.
***Compliance Monitoring Plan - updated and accurate. What has been reviewed/revised and if not, why not.
Notify interviewees and provide guidance on topics that may be discussed. Remind them to be honest and open.
If you have any query at all, Email us at Compliance Consultant NOW!
Notify the entire staff and remind them of best behaviour, security and other staff issues.
If a report is going to be generated, ask to discuss the main items (top 3,5,10 or whatever) before they leave - this provides you the oppoortunity of clearing up any misunderstandings or explain mitigating circumstances. This also provides you with an opportunity to potentially influence any corrective actions and timescales.
Post report there will be the usual autopsy, delegation and completion of remedial actions. Sometimes this is simple, and sometimes, if the requirements do not seem clear, it pays to get a specialist compliance professional in to either project manage or even implement the requirements under your direction and guidance.
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What To Prepare
Special Note. If you are not able to provide a desktop unit for access to your files, DO NOT expect the FSA staff to use a USB pen drive/USB stick from you inserted into their machines: provide them with a laptop to view anything held on storage devices. Viruses are commonplace.
Call 07092 289901 Now to arrange a free quotation
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