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FCA’s attestation push seeks more personal responsibility

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The Financial Conduct Authority is set to send an increasing number of letters to firms’ senior management asking them to attest their firm is compliant with its rules.

The regulator says it is focusing on individuals as this brings greater personal responsibility to supervision and can keep firms on their toes between formal visits.

Attestations can take the form of Dear CEO letters to a whole sector or to an individual within a single firm. An FCA spokesman says: “Attestations evolved from our greater emphasis on personal accountability. We find that when we ask for them, it focuses the mind not only of individuals but also of the firm.”

Telos Solutions director Richard Farr says: “There will be a rise in attestations because they are cheap and effective and the FCA can target a specific firm about a specific issue.”

Farr says any attestation should spark an internal review of the business before offering assurances to the regulator.

Bovill head of projects Rebecca Thorpe says: “Supervisors will be encouraged to gather data from many sources and will need to be smarter about how they use it.”

Jacksons Wealth Management managing director Pete Matthew says: “Good firms will welcome this move. I do not think it is too intrusive; it is a good way of monitoring compliance between formal visits.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. A good plan will it also include checks on firms that are not regulated and authorised e.g. solicitors, accountants, marketing firms etc

  2. A good idea, however, perhaps they will demonstrate a genuine commitment by starting with Capita and the banks first.

    Why is it that the FSA was always happy to go for individuals within IFAs, yet always avoided doing so when it came to institutional failings within the big boys.

    I guess that IFAs are unlikely to offer the same future career opportunities ………

  3. @ Peter Herd

    About as much use as the Food Standards Agency writing to you and asking you to attest that you meet the food hygiene standards. If they are not conducting regulated activity then how can they attest that they are following the rules…???

  4. Derek Bradley ceo Panacea Adviser 14th June 2013 at 10:45 am

    “Attestations evolved from our greater emphasis on personal accountability”.

    I get very worried by statements like this, To affirm something to be correct, true, or genuine:is effectively to certify by signature or oath:

    It is vital that firms comply but accountability continues to be a one way traffic flow with regulation, those who regulate having no accountability at all.

    A staring point for the FCA would be to refer to the Regulators Code. http://v2.panaceaadviser.com/img/20/documents/Regulators%20Compliance%20code.pdf

    Its aim was to embed a risk-based, proportionate and targeted approach to regulatory inspection and enforcement among the regulators it applies to.

    The expectation was that as regulators integrate the Code’s standards into their regulatory culture and processes, they will become more efficient and effective in their work. They will be able to use their resources in a way that gets the most value out of the effort that they make, whilst delivering significant benefits to low risk and compliant businesses through better-focused inspection activity, increased use of advice for businesses, and lower compliance costs.

    section 3.3 states that –

    Regulators should consider the impact that their regulatory interventions may have on small regulated entities, using reasonable endeavours to ensure that the burdens of their interventions fall fairly and proportionately on such entities, by giving consideration to the size of the regulated entities and the nature of their activities.

    Not much sign of that I fear.

    So beware of men demanding ‘oaths’!!!

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