Stage two: Regulatory review
The regulatory review process is how the FCA will supervise all smaller firms. The review will either be:
The way in which the FCA will select firms for a particular type of review will be driven by a number of factors. A major consideration will be the limitations of their resources which means that they will be unable to use supervisor led interaction in every case. Therefore the fact a particular firm receives a particular type of review is not a good or bad reflection on them but rather that the FCA is using their resources in the most appropriate way.
You will be given much more information about what to expect at the workshops when you are invited. The FCA will then notify you in writing about where, when and how your review will take place.
This review will aim to look across your firm and measure the effectiveness of your senior management in identifying and addressing the risks and controls you have in place. It will also look at the financial soundness of your firm and your ability to continue to provide products and services to customers.
The review will focus on five key areas
This approach to supervision will allow the FCA to form an overall view of your firm and identify risks. They will give you feedback at the end of the review outlining any good practices they observe. If they find there are areas that you need to make improvements on, they will tell you what these are and expect you to take the necessary steps to reduce the risks they have identified.
Your review is an opportunity for you to: