Policing small firms
Last month the FSA delivered its annual report for 2011/2012. Part of the report included an update on the regulator’s supervisory approach in small firms.
The FSA’s business plan 2011/2012 noted that in 2011 the watchdog would complete its three-year assessment programme for small firms, after which it would adopt a new, proactive supervisory approach, but which would nevertheless include many of the strands in the current assessment programme, including roadshows, assessments and follow-up visits.
The small firms’ regulatory review programme was launched in June 2011 and the first regional assessments and reviews were undertaken in January this year. The FSA launched its four-year rolling regional assessment programme, consisting of roadshows undertaken in the regions, followed by assessments (face-to-face, by telephone, or with an online assessment form). Random verification visits are then undertaken to verify the information provided by firms during the assessment or, if applicable, follow up supervisory action where firms were unable to demonstrate that they had effective governance, culture and/or controls.
It is estimated that all low-impact retail firms will receive an assessment in the next four years.
The FSA reported that it continues to deliver credible deterrence in the small firm intermediary market by taking enforcement action. It published 44 final notices and of these 24 were findings against significant influence function holders.
The regulator reported it has obtained an increasing number of outcomes in relation to unregulated collective investment schemes. This reflects its ongoing concerns in relation to the sale and promotion of Ucis. It imposed nine full or partial prohibitions and nine fines totalling £262,600 for failings in relation to Ucis.
The FSA also continues to take action against intermediaries involved in mortgage fraud as a result of information received from the information from lenders scheme. The regulator imposed 11 full or partial prohibitions and eight fines totalling £885,699 for mortgage fraud.
The regulator also imposed three prohibitions and one fine totalling £195,117 regarding insurance fraud, imposed one prohibition and two fines totalling £18,050 for client money failings, and published public censures in relation to two credit unions.
Philip Ryley is a solicitor and head of financial services and markets of Michelmores Solicitors