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CP21/4: Funeral plans: proposed approach to regulation – Helpline

CP21/4: Funeral plans: proposed approach to regulation

fca funeral plans authorisation pre paid

The FCA will regulate the sale and administration of pre-paid funeral plans from July 2022 and have today published a Consultation Paper which sets out their draft rules and approach to regulation. This does not mean that the recommended actions are carved in stone, but in our experience, 95% are  unlikely to change.


HOW CAN WE HELP?
In the previous 3 years, our authorisation related work has totalled 47% of our turnover. We have the specialisms that will help your funeral plan authorisation application easier.
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Who does this apply to?
This funeral plan authorisation consultation will interest:
  • firms that sell or carry out funeral plan contracts for funerals in the UK
  • investment advisers who provide advice on funeral plan contracts 
  • insurance firms who provide life insurance policies that back some funeral plans
  • trustees of trusts and discretionary investment managers which manage the assets of trusts that back some funeral plans
  • trade bodies representing firms that carry out or sell funeral plan contracts, including those representing funeral directors
  • groups representing consumer interests
  • consumers that have a funeral plan, or are thinking of purchasing one
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Why The FCA are consulting?
Funeral plans are products under which a consumer pre-arranges and pre-pays for their funeral with a provider, generally for a fixed cost. The funeral plan could be sold by a third-party intermediary or directly by the provider firm. Mis-selling of any pre-paid service for a time of grief and reflection that turns out to be different to expectations can be devastating. The regulator is well aware that existing contracts may have been sold on different terms to those set out in this consultation and our proposals will generally allow these contracts to continue on those terms. But firms will have to meet a range of standards in their dealings with existing customers as set out in this document, and the FCA’s overarching Principles for Businesses e.g. to treat customers fairly.
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From 29 July 2022, activities involving the provision and distribution of pre-paid funeral plans will come under FCA regulation, and firms conducting these activities will need to be authorised by them.
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The regulators proposed rules are intended to protect consumers that have, or will in future take out, a pre-paid funeral plan product. We want to see an improvement in outcomes for consumers in this sector, with better value products, better sales practices, and better controls in place so consumers can be confident they will receive the funeral they have agreed. The FCA’s proposed rules will also set a level playing field for firms – all firms who want to carry on this business after July 2022 will need to meet the same standards.
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Outcomes The FCA are seeking
Through our proposed regulatory approach, the FCA want to see a market which works well for consumers, including:
• products which offer fair value, meet consumer needs and are sold fairly
• well run firms with high conduct standards and sufficient resources and risk transfer arrangements to ensure ongoing delivery of funeral services
• consumers have time and all the necessary information to make better informed decisions when choosing between different products and whether a funeral plan is right for them at all
• protections in place to ensure the fair treatment of consumers, many of whom are likely to be vulnerable
• clear, proportionate and standards (that can be supervised) within firms in the sector must meet
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What does this means for firms?
All firms will need to be authorised by 29 July 2022 to continue carrying out activities relating to funeral plan business. The FCA strongly urge firms and other stakeholders to engage with the authorisation process where applicable.
From 29 July 2022, the Financial Ombudsman Service (FOS) will become responsible for resolving disputes about funeral plans.

July 2022 is 15 months away, why do I need to act now?

The authorisation process normally takes 26 weeks for a clean application and up to 52 weeks for others. As there will be a flood of applications, it is important to get your completed and thorough application together before September, so you can get in early and be counted. 
If you fail to get authorisation by 29th July 2022, you will have to cease trading in Funeral Plans.
FCA Funeral Plan Authorisation process
It is important that all Funeral Plan firms are aware of what they need to do and by when. The key elements are:
  • All funeral plan providers that wish to continue doing so, will need to apply to the FCA
  • Firms that sell funeral plans (and do not provide or administer them) can apply for direct FCA authorisation as an intermediary or become an Appointed Representative (AR) of a principal firm. The principal is responsible for the conduct of the AR. The Principal firm is required to notify the FCA in advance if they intend to appoint ARs
  • The authorisations gateway for applications is planned to open in September 2021 and firms need to ensure they are authorised before the regulation takes effect on 29 July 2022
  • Applications for authorisation and supporting documentation should be submitted as soon as possible after the FCA opens the applications gateway. If not submitted as soon as possible firms may not have sufficient time to demonstrate they meet the Threshold Conditions before the rules take effect on 29 July 2022
  • Firms currently trading that submit their applications after 1 November 2021, may incur a late application fee. Note: paying a late application fee does not guarantee that an application will be approved or determined before July 2022
  • When submitting an application, all firms need to demonstrate how they meet the minimum standards, known as Threshold Conditions, both at the time of authorisation and on an ongoing basis. These are the minimum standards that all FCA regulated firms must meet, to be able to undertake the regulated activities they want to carry on
  • If funeral plan firms, particularly those who provide or administer funeral plans, do not intend to be authorised, they should take appropriate steps to ensure they cease regulated activities and wind down/sell their book prior to 29 July 2022. Conducting regulated activities without authorisation is a criminal offence and doing so may result in prosecution
  • Funeral plan providers that are currently trading should let the FCA know if they do not intend to apply for authorisation
  • AR notifications should be submitted after the principal firm is authorised.

We have been enabling FCA authorisation Applications since 2008 and have a wealth of experience in this field for all manner of firms from Banks to Wealth Managers, Claims Management Companies to Stockbrokers and many more!

See some of our 5 Star Ratings on Google.

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The requirements for your firm to apply for FCA Authorisation requires a package of documents compiled in a way that the regulator expects. The contents are not proscribed so much as expected. The jargon used, needs to be acceptable to regulator-speak as the FCA admit in the handbook “… uses words and phrases that have specific meanings in the Handbook or in legislation; these may be different from, or more precise than, their usual dictionary meanings.”

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What Do We Have To Provide?
Sole Traders, Partnerships and funeral Plan providers will have certain additional requirements but all firms have to have;
  • Regulatory business plan (this is a specialised area – we can help!)
  • Wind-down plan (this is a specialised area – we can help!)
  • Vulnerable customer policy(this is a specialised area – we can help!)
  • Complaints handling policies comprising the below (this is a specialised area – we can help!):
             1. Complaints handling procedures
             2. Complaints root cause identification procedure
             3. Example Management Information (MI) for complaints root cause analysis and correction
  • Compliance monitoring procedures comprising the below (this is a specialised area – we can help!):
             1. Compliance monitoring programme
             2. Example MI to monitor ongoing compliance with FCA rules
  • Financial projections comprising the below:
             1. Opening balance sheet
             2. Forecast closing balance sheet at the end of the first 12 months of trading post-authorisation
             3. Monthly cash flow forecast for first 12 months of trading post-authorisation
             4. Monthly profit and loss forecast for first 12 months of trading post-authorisation
  • Latest annual accounts (if already trading)
  • Up-to-date management accounts (if already trading and year-end date for most recent annual accounts is greater than 12 months)
  • Companies House form (SH01) (if applicable and firm has already capitalised)
  • Details of source of funding (if firm is not a limited company, sole trader or partnership)
  • Details of subordinated loans (if applicable)
  • Details of other external funding (if applicable)
  • Detailed IT controls form (if applicable)
  • Evidence of the firm’s registration with the Information Commissioner’s Office
  • Staff organisation structure chart (if applicable)
  • Controller forms
  • Controller and close link structure chart (if applicable)

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If you want to consider a Fixed Price option and need regulatory compliance help to complete your application, you need to

book a discussion with us.

Either

Call 0207 097 1434,

Email info@complianceconsultant or,

If you want a chat about your situation – and to save backwards and forwards with emails etc – please book a mutually convenient time here  –  https://calendly.com/compliancedoctor/compliance-consultant-zoom-meeting

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Is the FCA creating a new category of customer with the Vulnerable Customer Guidance?

compliance specialist vulnerable conduct risk

Is the FCA creating a new category of customer with the Vulnerable Customer Guidance?

compliance consultants london vulnerable customers

One of the key elements of the FCA’s remit is ensuring consumers have an appropriate degree of protection. Specifically at this time and central to their role, includes protecting vulnerable consumers.

Protection of the most vulnerable is a sign of an advanced society, but not necessarily if it removes individual responsibility or deprecates the need for autonomous decision making in lieu of expensive and cossetting rules. What of the expense of a provider of products, who will then have to increase costs to meet the imposed procedures and standards for this “category” of consumer. Could this then exclude the most vulnerable and financially deprived even further of the services of the society it forms part of?
The Guidance (FG21/1-Guidance for firms on the fair treatment of vulnerable customers) identifies in the introduction that “When we (the FCA) consider our consumer protection objective, we have regard to the general principle that consumers should take responsibility for their choices and decisions. However, we know that there are very real factors that might limit their ability to do so.”
The FCA obviously want vulnerable consumers to experience outcomes as good as those for other consumers and receive consistently fair treatment across the firms and sectors they regulate. Does the existing Conduct Risk and Treating Customers Fairly initiative, fail to cover this already?
Further, the “vision” as stated in point 1.7 of the Guidance states “We want to see the fair treatment of vulnerable customers embedded as part of a healthy culture throughout firms, not just on the frontline but also in areas such as product development. Firms’ senior leaders should create and maintain a culture that enables and supports staff to take responsibility for reducing the potential for harm to vulnerable customers. They should ensure that firms embed the fair treatment of vulnerable customers in their policies and processes throughout the whole customer journey. We have seen some good examples where commitment comes from the top and where there is a culture of feedback and learning from the frontline.”
In FG 21/1 the FCA state We expect firms to provide their customers with a level of care that is appropriate given the characteristics of the customers themselves. The level of care that is appropriate for vulnerable consumers may be different from that for others and firms should take particular care to ensure they are treated fairly.
Does this then mean that there is a comparable category of customers (predominantly retail based) that are considered as vulnerable at various times, so they overlap with normal and embedded TCF treatment rom time to time. With recent statements that nearly one third of UK adults are “vulnerable” due to the pandemic, this then puts the onus on firms to draw up a raft of assessment tools to test the vulnerability of every consumer, customer or client they have contact with. This also lends itself to those who may not be “natural persons” and act on behalf of incorporated bodies or even associations of firms that may display signs of vulnerability. This is a “should” and cannot be ignored, thus, perhaps a seperate regimen of assessment is needed?
Throughout their document, the regulator uses terms like 
Must: where an action is required by a Principle or rule. (25 appearances)
Should: where we think a firm ought to consider a course of action (not specified in a Principle) to comply with a Principle, but that does not necessarily mean they should follow a detailed or prescribed course of action. (207 appearances)
May: where an action is only one of several ways of complying with a Principle. (203 appearances)
To be fair, the “Must” references are predominantly concerning the Data Protection applicable references. However, this makes the should, even more poignant.
In the guidance document, under customer service, it states that firms should; 
  • Set up systems and processes in a way that will support and enable vulnerable consumers to disclose their needs. Firms should be able to spot signs of vulnerability.
  • Deliver appropriate customer service that responds flexibly to the needs of vulnerable consumers.
  • Make consumers aware of support available to them, including relevant options for third party representation and specialist support services.
  • Put in place systems and processes that support the delivery of good customer service, including systems to note and retrieve information about a customer’s needs.
To ram home the point, in the TCF section the FCA state; “Under Principle 6 we expect firms to have management information (MI) or measures in place to test whether they are treating their customers fairly, including delivering the 6 TCF outcomes. The MI should demonstrate to firms and to us that they are consistently treating customers fairly and delivering the TCF consumer outcomes.” Regrettably in, in our experience as a consultancy, many firms that we have seen wildly inadequate or outdated MI, some that has not been refreshed with contemporary data!
So how much of this can be consider necessary and how much is proportionate? 
The answer to that needs to be looked at under the “Must” statement, such as the Principles for Business PRIN 1.2.1G states that the extent to which firms meet their requirements under Principles 6, 7 and 9 will depend, in part, on the characteristics of the customers concerned. The relevant interests and needs that firms must have due regard to and what is reasonable care in the relevant circumstances will depend on those characteristics. The way to establish those characteristics is then to assess them, which requires a full process to identify any vulnerability on all customers. Therefore this means that every firm must instigate the requirements without fail, whether they deal with any of the categories of customer, consumer or client.
The requirements, of course, are welcome for the treatment of vulnerable customers, and I know first hand of the abuse that firms engage in from a close relative of mine and their treatment. But the requirements do not end at the consumer. Firms are required to ensure that staff are fully GDPR trained as when handling data, it should be managed appropriately. The ICO is clear that consent is not always needed to process data.
Product design should cater for vulnerable customers, and that has been echoed through time under the TCF regime. Customer services, KYC onboarding etc are required to have available systems and processes in a way that will support and enable vulnerable consumers to disclose their needs. Firms “should” be able to spot signs of vulnerability, which means that if you don’t have the systems or procedures in place, you are not conforming to a “should”, whereby the FCA think a firm ought to consider a course of action (not specified in a Principle) to comply with a Principle. Further, to deliver appropriate customer service that responds flexibly to the needs of vulnerable consumers, another part of the “should” means you need a written process that can be switched into on identification of any area of vulnerability. Don’t forget, someone may be vulnerable under more than one area.
Every firm also needs to readdress their communications to customers and encapsulate the possibility of vulnerability, and inform them of all facilities available. With that, staff skills and capability needs to be considered and evidenced (SMCR reasonable steps as well as TCF). Firms are required to embed the fair treatment of vulnerable consumers across the workforce. All relevant staff should understand how their role affects the fair treatment of vulnerable consumers. Alongside that role responsibility, frontline staff have to be able to demonstrate the necessary skills and capability to recognise and respond to a range of characteristics of vulnerability. As a good employer, firms should also offer practical and emotional support to frontline staff dealing with vulnerable consumers. These areas are often lacking in most firms we encounter, but there is now guidance on what is required and the areas that need to be interrogated for ways to enhance your service.

Summary

Is the FCA creating a new category of customer with the Vulnerable Person Guidance? We would have to say no, but the impact of dealing with any customers, consumers or clients needs to be minutely investigated and areas for improvement identified. This would be a fairly major project for most firms, and the worst part is, if they don’t take external opinion, they will continue to choke on their own exhaust. 

info@complianceconsultant.org or call 0207 097 1434 to arrange an exploratory call.

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Getting Ready For The 6AMLD

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aml specialist consultants londonThe sixth anti-money laundering directive (6AMLD) is almost here. It has been n effect in EU member states since December 3, 2020, all financial institutions must implement the directive by June 3, 2021.

While there are fewer big changes than previous directives, 6AMLD brings clarity to specific regulatory details to close loopholes, toughen penalties, and encourage greater cooperation. Its goal is to empower financial institutions and states to do more in the fight against money laundering and the financing of terrorism.

UK financial services businesses

The UK has chosen to opt-out of abiding by further AML policy as the Government believes that domestic legislation is already mostly compliant with the Directive’s steps and, in most cases, goes even more than what 6AMLD proposes. For example, in the UK, the maximum penalty for money laundering is fourteen years, going beyond the new four-year minimum needed by 6AMLD; and aiding and abetting offenses of helping, motivating, and trying to launder money is currently a criminal matter.

However, it is essential to keep in mind that UK-based businesses in the monetary sector that operate within the EU jurisdiction will require to comply with the modifications set out in 6AMLD.

Access to clean and available international customer data for effective AML/ KYC screening

To be ready for 6AMLD, those in financial services require to know their clients, whoever they are. The key is to have access to billions of consumer records worldwide from trusted data streams; these consist of federal government firms, credit firms, and energy records for cross-check and verification purposes. It is particularly essential to obtain confirmation of important proof of address. Having access to up-to-date watch lists, such as politically exposed Persons (PEPs) information as part of this dataset is likewise essential.

From a customer experience perspective, the checks leveraging this data should take place in real time to prevent slowing the consumer onboarding procedure. This data should also originate from a single source to avoid the requirement for many expensive providers in various markets. This issue frequently results in irregular ID data and supply chain management issues.

Regtech: MRZ and ORC ID document scanning and biometrics to support 6AMLD compliance

When it pertains to remote onboarding, banks need to use machine legible zone (MRZ) and optical character recognition (OCR) innovations to gather customer ID and extract important details. This ensures the ID is real and validated in real time. The image ID embedded in these scanned documents supports biometric ID confirmation, such as facial acknowledgment, which can likewise help securely speed up consumer engagements.

Nevertheless, the biometric innovation must provide liveness checks, such as eye motion, for proof of life confirmation. This is vital with scammers significantly utilizing creative approaches like 2D images and video playback to try to trick facial recognition technology and ‘prove’ they are the person they are impersonating. In fact, this process can result in money services (MSPs) and Payment Service Providers (PSP) organisations getting a due diligence report related to AML and KYC that can be used to show their compliance when it comes to regulatory checks.

To prevent money being laundered and prevent extreme sanctions, financial services companies operating within the EU needs to comprehend and be ready for 6AMLD by the June due date. Ideally, this must involve having access to billions of consumer records worldwide for cross-check and ID confirmation functions, helping recognize individuals throughout borders. They must also undertake document scanning with MRZ and ORC innovation, which will also allow delivery of biometrics that help to safely speed up engagement with customers. Embracing these procedures will decrease the concern of compliance and equip financial institutions for more stringent global policies in the future.

 

If you have any questions or want further assistance, please contact us by email – info@complianceconsultant.org or call +44 (0) 207 097 1434

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Payments Business? Have Your Say! Don’t Miss This

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Payments Business? Have Your Say! Don’t Miss This!

Get the lowdown on the FCA Strong Customer Authentication (SCA) Consultation Paper plans. Download the free brochure here.

If you have any areas of concern, please call us on 0207 097 1434 or email info@complianceconsultant.org

Actual Google Review
Actual Google Review

Psd2 Strong Customer Authentication Regulation, Strong Customer Authentication, Strong Customer Authentication (Sca), Strong Customer Authentication (Sca) Requirements, Strong Customer Authentication (Sca) Uk

Training & Competence – T&C

Training & Competence – T&C

Training & Competence t&c

The importance of this section cannot be under stated. Due to the changes in this area and post-Brexit potential changes, we consider it prudent to provide a link to the FCA Handbook https://www.fca.org.uk/firms/training-competence 

Additionally, you may find these points useful;

How are individual training needs identified and by whom?
Identifying the training needs for each role in the T&C scheme should start with the professional knowledge / qualifications required of that role. Professional bodies like the CII (Chartered Institute of Finance) and Chartered Institute for Securities and Investment (CISI) run both training programmes and provide qualifications. A second source of guidance is your professional trade body. Many trade bodies host interest groups on T&C that will enable networking and the opportunity to benchmark with other similar organisations. The third source of guidance should be your internal HR team. If you don’t already have the competency requirements defined for the roles in the T&C scheme, they should have the expertise to help you define what these are. HR should be a key resource for guidance on the competency requirements of each role beyond the core set of professional knowledge / qualifications. Once defined for each role, these competency frameworks form the basis for the identification of training needs that should be aligned by role. All that remains then is to organise any training needs in a logical sequence. On a final note, training needs can arise at any time and a key part to effective identification is supervisors who are trained and capable of not only spotting training needs but providing appropriate support to resolve them.
How are the learning objectives, timescales, responsibilities and measurements set defined for each training need identified?
This depends on the nature of the training needs. There is a great deal of discretion for firms to decide how they define and subsequently deliver their training. Professional bodies usually set annual standards for continuing professional development (CPD) for their members and many firms will also have their own in-house expectations too. These CPD requirements will often be split into structured versus unstructured learning. In fact, the FCA requires that retail investment advisers need to complete 35 hours of CPD each year. Successful completion of this CPD enables the individual to retain their Statement of Professional Standing (SPS). Beyond the CPD targets set by professional bodies, firms can and do set their own CPD requirements. This should be linked to the required measurements and timescales and be evidenced as part of the T&C Scheme arrangements.
In essence, any training identified should be noted via a SMART training plan that allows anyone looking at an individual’s development to be able to see when the need was identified, how will it be met and, when it is met, how will the change be measured.
What is in place to ensure training remains effective and up to date?
Training plans should be subject to regular review. There should be corporate training input that is managed by a central training team and typically will cover the provision of e-learning together with behavioural type inputs such as selling skills, handling difficult clients etc. Then you have the localised training that will tend to be managed by the T&C Supervisor. This is where small needs are identified through other T&C activities and then localised on the spot training is delivered to meet the need.  The trick here though is once again for a well-trained supervisor who can identify, manage and deliver against these needs, ensuring of course that everything is documented on the individual’s records, because if you can’t evidence it then in the eyes of the regulator it didn’t happen.
Who is responsible for ensuring training is timely, appropriate and evaluated?
At a localised level it is the T&C supervisor that needs to cater for the needs of the individual through either 1:1, group or referred training. Each training intervention should be evidenced through some type of Training Event Record that details what the training need is, what the proposed solution is and how this will be taken into the workplace. A structured approach of this nature then allows the T&C Scheme activity to be reviewed by the most senior overseer of the scheme to help ensure that training needs are either being met in the field or referred where a more formalised response is required.
How is training evaluated and by whom?
Who takes responsibility for making assessments about the competence and capabilities of individuals will vary across different organisations. However, responsibility for evaluating the effectiveness of training tends to fall to the staff member’s immediate line manager, dedicated T&C supervisors or, in some cases, a mix of both. Because whilst training is the input, the most effective way of evaluating its success is looking at the output and that means reviewing the individual whilst operational in role. The T&C scheme should define who assesses what activities and training will typically be evaluated at the point of delivery (by the training team) and at the point of use by the supervisory team.

If you need to create, review or execute your Governance. Risk or Compliance strategy, call us today on 0207 097 1434 or email info@complianceconsultant.org.

This guide is only an aide memoire and intended for information only for anyone appraising the documentation needed in an audit/compliance check. It is not to be considered as direct advice or intended to replace specific 1 to 1 engagement with your compliance and risk professional.

Why Is Document Version Control So Important?

Why Is Document Version Control So Important?

london compliance specialists regulatory PRA FCA

 

Why is Version Control Important?

Version control is important when documents are being created, and for any records that undergo a
lot of revision and redrafting or annual reviews. It helps us to track changes and identify when key decisions were
made along the way. It is particularly important for electronic documents that are being reviewed
by a number of different users.

Knowing which version of a document you are looking at is important if you are trying to find out which version of a policy is currently in force, or which version of a policy was in use at a particular time. It forms good records keeping practice which is particularly important in meeting our obligations under the Freedom of Information Act.

Aim
The aim of this document is to provide best practice guidance for applying version control to
different types of document at the University of Nottingham. This guidance covers best practice use
of:
1. File Naming conventions
2. Version Numbers
3. Version Control Tables
4. Document control Tables

File Naming Conventions
At the simplest level you can use file naming conventions to identify the version of a document. Use
the file name of the document to determine both the version and status alongside the subject , for
example:

DRAFT
Records Management Policy Draft v0.1

Records Management Policy Draft v0.3

PUBLISHED

Records Management Policy v1.0

Records Management Policy v1.1 (note: first revision – minor)

Records Management Policy v2.0

Remember to update the version number on the file name as well as the header (or footer) of the
document itself. It is easy to update a document and forget to rename the version number on either
the file name or the document which can lead to confusion.

Unless you don’t need to keep previous versions of the document, always save updated versions as
‘Read-only’ tag to ensure you are forced to create a new version the next time to go to update it.

File naming conventions alone will not tell you who made the change and what the change was. If it
is important to record this information use a version control table.

Version Numbers
Version numbering helps to distinguish one version of a document from another. For some
documents, you may decide that a simple numbering system consisting of consecutive whole
numbers is sufficient to help you keep track of which version you are working on. However,
documents that go numerous stages of development before a final version is reached, and for those
that are developed through input by multiple individuals, you may decide to adopt version numbers
to keep track of both minor and major changes to that document.

Minor Revisions
Minor revisions are small changes made to a document such as spelling or grammar
corrections, and other changes that… Minor revisions to a document are reflected by making
increments to the decimal number.

Major Revisions
Major revisions are changes to a document that require the document to be re-approved
(either by an individual or a group). Major revisions are reflected by incrementing the whole
number by 1.

document control version control

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document control version control

Remember – when electronically storing documents, it is often best practice to include the date at the front in reverse, as computers store files incrementally. So – 1st March 2021 becomes 20210301.

 

If you need to create, review or execute your Governance. Risk or Compliance strategy, call us today on

0207 097 1434 or email info@complianceconsultant.org.

This guide is only an aide memoire and intended for information only for anyone appraising the documentation needed in an audit/compliance check. It is not to be considered as direct advice or intended to replace specific 1 to 1 engagement with your compliance and risk professional.

FCA Fine? You may be in good company!

Compliance Monitoring Plan template

FCA Fine? You may be in good company!

Penalties for regulatory compliance breaches can be eye-watering in scale.

2020 largest Fines
1. Goldman Sachs International (fined £97m)
PRIN 2 and PRIN 3 breaches – Risk management failures

2. Lloyds Bank, BoS & The Mortgage Business (fined £64m)
PRIN 3 & 6 breaches – Poor handing of mortgage customers

3. Commerzbank (fined £37.8m)
PRIN 3 breaches – AML failings

4. Barclays (fined £26m)
PRIN 6, PRIN 3, and CONC rules breaches – unfair treatment of customers in the Retail Banking sector

5. Charles Schwab (fined £8.96m)
PRIN 10 and 11, CASS and Section 20 FSMA breaches – Safeguarding and Compliance Issues

6. Moneybarn (fined £2.8m)
PRIN 6 & 7 and CONC rules breaches – Unfair treatment of customers

How could these fines have been avoided?

The FCA’s ‘Principles for Business’ (PRIN) set out the fundamental obligations for firms under the regulatory regime.

According to the FCA principle 3, a firm ‘must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems’.

This refers to a firm’s:

  • Robust governance arrangements – rules, practice and processes. How Can We Help? We can review your arrangements.
    Skills, knowledge and expertise of staff – in other words train people!
  • Outsourcing responsibilities – know your suppliers and make sure they are compliant. How Can We Help? We can review your arrangements.
  • Reasonable steps – under SMCR you need to ensure you have decision making fully and appropriately records. How Can We Help? We can review your arrangements.
  • Record-keeping – keep records, and make sure they are accurate and up-to-date. How Can We Help? We can review your arrangements.
  • Conduct Risk – keep records of any T&C breaches, mis-selling, product design etc. How Can We Help? We can review your arrangements.
  • Conflicts of interest – keep a compliance register to avoid issues. How Can We Help? We can review your arrangements. 

The FCA will identify potential or actual consumer harm caused by the actions of firms or markets and take action to address that conduct. These penalties should act as a clear warning to any companies who aren’t taking financial compliance as seriously as they should be.

If you would like to have any of your processes, files, procedures, governance or strategy planning reviewed, in confidence, we can be contacted on the above number. Or, just complete the form below.


     

    Fca Principles For Business Conflicts Of Interest, Fca Principles For Business Rules, Fca Principles For Business Smcr, Fca Principles For Business Sourcebook, Fca Principles For Business Tcf, Fca Principles For Business Treating Customers Fairly, Principles For Business, Principles For Business Sustainability, Principles For Business Vulnerable Customers

    PSD2 Guide To Safeguarding & Wind Down Planning

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