SUP 5 Annex 1 Examples of when the FSA may use the skilled person tool (This Annex belongs to SUP 5.3.1G)
Toolkit purpose |
Purpose for use of tool |
Examples of reasons for use of tool |
Diagnostic |
• To find out more about a concern (e.g. the result of a visit, risk assessment, or notification) and determine whether action is needed to mitigate a risk to the regulatory objectives or to determine whether there may have been a breach of a rule or of a threshold condition. • To assess the implications of, and firm's* response to, a change of circumstances e.g. - proposed entry into new business area; - new control structure; - merger or take-over; - new IT system; or - launch of an E-Commerce venture. |
• Concern about effectiveness of the firm's* internal audit department. • Concern about reliability of submitted financial returns. • Inability of a firm* to quantify its current financial position. • Assessment of consequences of incomplete customer files. • Concern about quality of systems and controls. • Indication of financial crime or money laundering. • Concern about a firm's* controller. • Assessment of control structure when a bank (specialising in consumer lending) diversifies into commercial lending. |
Diagnostic/monitoring |
• To verify information provided to the FSA. |
• Verification of a specific return to give the FSA assurance of the quality of information provided. |
Monitoring |
• To review systems and controls • To complement baseline monitoring |
• Assessment of systems and controls in firms* where identified as a risk mitigation priority. • In-depth review of part of a firm* which is material to the firm's risk profile but of which the FSA does not consider it has an adequate, up-to-date understanding. |
Preventative |
• To gather and analyse information on an identified risk and develop recommendations for resolution. |
Review of identified control weaknesses over client money to obtain recommendations to ensure compliance with the relevant rules. |
Remedial |
• To assist in the design of a customer redress programme. • To assist in the design of a remedial action plan. • To oversee and report on remedial action plan. |
• Where possible, the FSA has identified possible losses from failure to reconcile assets or from mis-posting of transactions to the general ledger. • To report on quality of work undertaken and adherence to milestones in the action plan. |
* or, where applicable, the other persons in SUP 5.2.1 G. |