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CRED 14.2 Information gathering by the FSA on its own initiative

Application and purpose

CRED 14.2.1G

This section and SUP 2 apply to all credit unions.

CRED 14.2.2G

The section is a summary of SUP 2.

CRED 14.2.3G

Achieving its regulatory objectives involves the FSA informing itself of developments in credit unions. The Act requires the FSA to monitor a credit union's compliance with requirements imposed by or under the Act. For this purpose, the FSA needs to have access to a broad range of information about a credit union's business.

CRED 14.2.4G

The FSA receives information through a variety of means, including regular reporting by credit unions. This section is concerned with the methods of information gathering that the FSA may use on its own initiative.

CRED 14.2.5G

SUP 2.1.5 G states that the FSA has statutory powers, including:

  1. (1)

    to require the provision of information;

  2. (2)

    to require reports from skilled persons;

  3. (3)

    to appoint investigators; and

  4. (4)

    to apply for a warrant to enter premises.

CRED 14.2.6G

The FSA prefers to discharge its supervisory functions by working in an open and cooperative relationship with credit unions. The FSA will look to obtain information in that way unless this will not achieve the necessary results, in which case it will use its statutory powers.

Information gathering by the FSA on its own initiative: background

CRED 14.2.7G

SUP 2.2.1 G states that failure to cooperate with the FSA makes a credit union liable to regulatory sanctions, including discipline under the Act. But this:

  1. (1)

    is not a criminal offence;

  2. (2)

    cannot lead to a person being treated as if in contempt of court.

CRED 14.2.8G

When the FSA obtains confidential information using the methods of information gathering described in SUP 2, it is obliged to treat that information as confidential and will not disclose it without lawful authority, for example the consent of the person from whom that information was received.

Information gathering by the FSA on its own initiative: cooperation by credit unions

CRED 14.2.9G

SUP 2.3.1 G sets out the various methods of information gathering that the FSA will use on its own initiative which require the cooperation of credit unions:

  1. (1)

    supervision visits on a regular or sample basis;

  2. (2)

    meetings at the FSA's offices or elsewhere;

  3. (3)

    provision of information or documents.

CRED 14.2.10G

The FSA expects to be able to give reasonable notice to a credit union when it seeks information, documents, meetings or access to business premises. On rare occasions, however, the FSA may make unannounced visits.

CRED 14.2.11G

SUP 2.3.3 G - SUP 2.3.4 G state how the FSA considers that a credit union should cooperate in providing access to its documents and personnel:

  1. (1)

    make itself readily available for meetings as reasonably requested;

  2. (2)

    give access to any records, files, tapes or computer systems which are within its possession or control, and provide any facilities that are reasonably required;

  3. (3)

    produce specified documents, files, tapes, computer data;

  4. (4)

    print information which is held on computer or microfilm or otherwise convert it into a readily legible document;

  5. (5)

    permit copying of documents or other material on its premises at its reasonable expense;

  6. (6)

    answer truthfully, fully and promptly all questions which are reasonably put to it.

CRED 14.2.12G

SUP 2.3.5 R states that a credit union must permit access, with or without notice, during reasonable business hours to its business premises in relation to the discharge of the FSA's functions under the Act. It must also take reasonable steps to ensure that others, such as agents and suppliers under material outsourcing arrangements permit such access to their business premises.

"Mystery Shopping"

CRED 14.2.13G

Representatives or appointees of the FSA (which may include individuals engaged by a market research firm) may approach a credit union in the role of potential members. This is known as "mystery shopping". The FSA expects that any "mystery shopping" it arranges will be conducted in accordance with the Market Research Society Code of Practice. The FSA may use the information it obtains from mystery shopping in support of both its supervisory functions and its enforcement functions. This includes sharing any information so obtained with firms and approved persons.1 (See SUP 2.4.1 G - 1SUP 2.4.5 G).