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Calls for FCA to be more open on compliance guarantees

The FCA needs to give more information on the way it is using compliance guarantees despite publishing data on their use for the first time, according to regulatory experts.

Last week the regulator published quarterly statistics on its use of attestations.

An attestation is a written confirmation that a firm is meeting certain regulatory requirements. They can take the form of a Dear CEO letter and are usually required by the chief executive but can also be required of other individuals holding a significant influence function such as directors or compliance officers.

In July, Money Marketing revealed concerns the FCA was not being transparent in its use of attestations.

The following month the FCA said in response to a Freedom of Information request from Money Marketing that it does not track attestations for C3 and C4 firms – medium and small companies respectively. Among C1 and C2 firms, it had requested 186 attestations since it began using them in 2012.

Its first set of quarterly data shows it requested a total of 59 attestations in 2014.

Of these, 15 were from C1 firms, 34 were from C2 firms, and five each were from C3 and C4 businesses.

Firms in the long-term savings and pensions sector were subject to 13 attestations, while wholesale and investment management firms were subject to 21.

The FCA requested eight attestations from mortgages and consumer lending firms, 11 from retail firms and six from general insurance and protection companies.

The Consulting Consortium associate director Mike Harrison says: “Without specific information on what firms have been asked to attest to it can be difficult to gain anything tangible from these statistics.

“A key aspect that we don’t have data on is what are the consequences of failure. In order for the true impact of this tool to be realised, the industry would benefit from learning what happens after the attestation has been made. For instance, how are they followed up, and how many have lead to a section 166 report or other enforcement action?”

Pinsent Masons senior associate Michael Ruck says: “The test will be whether the use of attestations increases and when we see the first enforcement action arising from an attestation. It would be helpful for the FCA to publish data on the purpose of the attestations.”


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  1. FCA: We’ve got you by the short & curlies so sign here or else. We’ll tell you later (if we feel like it) just what this will actually mean.

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