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FCA “hit squad” signals shift in firm supervision

Martin-Wheatley-700x450.jpg
FCA chief executive Martin Wheatley

The Financial Conduct Authority’s more aggressive approach to regulation has seen the creation of a regulatory “hit squad” which signals a shift in the relationship between supervisors and firms.

Under the FCA, fewer supervisors are allocated to specific firms. Instead firms are categorised into one of four conduct supervision categories, ranging from C1 which cover banks and insurers, down to C4, covering smaller firms including almost all advisers. C1 and C2 firms have a nominated supervisor, while C3 and C4 firms do not.

A new team has emerged under this structure called the “events-driven” team, which is part of FCA supervision.

Law firm Norton Rose Fulbright global head of financial services Jonathan Herbst, a former head of European law at the FSA, says this team has resulted in a noticeable change in firm supervision under the FCA.

He says: “Firms that do not have a supervisor never quite know when the regulator is going to show up. There are certainly firms that do not have a supervisor that are on the FCA’s radar. We will find there are quite large asset managers, large brokers, and indeed IFAs that do not necessarily have a supervisor but that does not necessarily mean these firms are not going to be of interest.

“Firms that do not have a supervisor will find there is effectively a new supervision team taking the lead, a kind of hit squad descending on firms. Firms have got to be a lot more on their toes now.”

The FCA declined to comment.

Plan Money director Peter Chadborn says: “We are the ones that end up paying for failure, so if we want a better regulator we will have to stomach this new approach.”

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Why is it every time some one opens their arrogant mouth at the FCA it either to inform us how bad and un-trustworthy we are, or its a statement of intent to try and scare us.

    Is this really what the industry needs to be ruled by unworkable rules, costs and fear ?

    Welcome to Great Britain or should I say Tibet ?

  2. Ach so! The Gestapo lives.

    Heil FCA. Seig Heil!

  3. Indeed financial services firms of all sorts need to be more greatly ruled by fear. Not necessarily by pettifogging rules but by apprehension that if they are not behaving well there will be consequences. Defining “behaving well” is tricky and hard for lawyers to pin down – but it is easier for seasoned practioners to judge. More palm tree justice.

  4. Let’s just be careful we don’t gripe whichever the Regulator(s) cuts it. If this is just a way of saying they are not going to tick and bash everyone on a rota basis, but turn up when they identify hot spots … well that just might be quite a sensible approach.

  5. Karl Knackerbollokoff 26th July 2013 at 11:53 am

    Wasn’t Clive Adamson quoted in the press just a few weeks ago as having claimed that “the FSA is not an aggressive regulator”?

    Perhaps these new teams might be appropriately termed Special High Intensity Tactical squads.

  6. So long as they go after the right people / firms then this is a good thing.

    For too long the regulator has (and still is) been very slow to react to issues.

    If this is them acting to nip things in the bud quicker then this ie better for consumers and the industry.

  7. Is anyone going to prison for the Libor rate fixing ? Did anyone go to prison for the mis selling (fraud) of Ppi? What about mortgage sales frauds leading to the 2008 crash? Mark my words it will all happen again and be much worse because money talks, not regulation

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