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Status: You are viewing the version of the handbook as on 2009-03-31.

SUP 5 Annex 1 Examples of when the FSA may use the skilled person tool (This Annex belongs to SUP 5.3.1G)

G

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.