How to deal with a transforming FCA: Supervision

  • Date: 15 June 2022
  • Format: Recorded Webinar

Series: How to deal with a transforming FCA

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On 15th June 2022, we hosted the second webinar in our ongoing series 'How to deal with a transforming FCA'. In this webinar, hosted by Philip Naughton and James Borely, we examined some of the key themes around supervision and offered practical advice on how to navigate the FCA's increasingly exacting standards.

The webinar also includes a useful panel discussion with four more of our expert consultants, each with their own expertise on a different sector within financial services. Our panelists include:

If you are interested in watching the first webinar in the series where we focus on Authorisations and Regulatory Transactions, click here.

Background

In its Business Plan the FCA provided more detail about its Transformation Programme, recognising a need to make changes internally and promised to make its standards higher, with more intensive assessment and greater scrutiny of firms’ financials and business models. The next in our series of webinars focusing on the transforming Regulator will explore what supervision means, why it is coming under the spotlight and what the FCA expects from firms.

One of the focus areas outlined in the FCA Business Plan 2022/23 was 'setting and testing higher standards', with the FCA stating that it intends to be more ‘proactive’ regarding supervision. The implementation of the early oversight team providing enhanced supervision for the first 2/3 years after a firm is authorised, as well as firms growing significantly, is testament to this. 

More robust supervision and enforcement, coupled with the 'getting it right first time' approach the FCA has adopted, means more scrutiny on firms, with an emphasis on having processes in place for testing as well as an increased importance being placed on being able to provide evidence of compliance. Additionally, the FCA have stated that they will be taking an increasingly data-led approach, especially regarding systems and controls. This is likely to see firms receive an increase in data requests.

Speakers:

Host: Philip Naughton, CEO, Compliancy Services

Presenter: James Borley, Managing Director, Payment Services

Agenda

Introduction

  • How does the FCA currently supervise?
  • The history of supervision at the regulator 
  • The difficulty of supervision – it is a ‘discretionary’ activity?
  • What are the perceived issues with current supervision and why is the FCA ‘transforming’?

Categories of supervision as a regulated firm

  • Fixed portfolio vs. flexible portfolio - 55,000 firms to supervise: what does that look like in terms of supervision 
  • What do we know about Early & High Growth Oversight so far?
  • What about dual-regulated firms?

Reporting

  • Regulatory returns
  • Increase in Data requests from the FCA – what are they doing with it?
  • What happens when there is a breach?

Thematic reviews

  • Overview of thematic reviews
  • Examples of thematic reviews, including AML, Principals/ARs, Wind-down Planning and Safeguarding

Testing

  • What is the FCA looking for in its supervision? 
  • Increased focus on the quality of testing
  • How does a firm demonstrate its testing is fit for purpose?

Forecasting – what’s coming down the road?

  • What is the general direction that the FCA seems to be heading in?
  • AI
  • Permissions: Use it or lose it
  • Ready, willing and organised

Panel discussion / Q&A

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