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FSA sets out how FCA will supervise small firms

FSA Front 480

The FSA says the incoming Financial Conduct Authority will have “touch point” contact with all adviser firms at least once every four years, with firms viewed as higher-risk subject to face-to-face interviews.

In its Journey to the FCA document, published today, the regulator says it intends the FCA to have contact with firms through roadshows, interviews, telephone calls, online assessments or a combination of these options.

The nature of the regulator’s interaction with firms will depend on the level of risk each firm is seen to pose. Firms deemed to be high-risk and around 25 per cent of firms deemed medium to high risk will have face-to-face interviews. Those deemed high-risk after follow-up work will receive a supervisory visit.

The FCA will use risk-profiling tools based on online reports submitted to filing system Gabriel and information recorded by the FCA during firm visits to determine risk levels.

FCA Categories 480

The document sets out that intermediary firms will be classed in supervision category C4 which means they will be supervised by a team of sector specialists rather than a nominated supervisor.

The document says: “We intend having a ‘touch point’ with all C4 firms once every four years. The exact interaction will depend on our assessment of the risk such firms pose to our objectives. Those deemed to be lower risk may only be required to complete a formal online assessment once every four years. We will carry out visits to some of these firms to verify the results of this assessment.”

Lentune Mortgage Consultancy director Stuart Gregory says: “It is good that the FCA will have a structure in place so firms know how often they are likely to have visits.”

FCA approach 480


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