Related provisions for SUP 16.18.10
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(1) A firm20 must allocate to a director or senior manager the function of:8818(a) having responsibility for oversight of the firm's compliance; and(b) reporting to the governing body in respect of that responsibility.1(2) In 10 (1) "compliance" means compliance with the firm’s obligations under the regulatory system in relation to which the FCA has responsibility.20
9(1) Depending on the nature, scale and complexity of its business, it may be appropriate for a firm to delegate much of the task of monitoring the appropriateness and effectiveness of its systems and controls to an internal audit function. An internal audit function should have clear responsibilities and reporting lines to an audit committee or appropriate senior manager, be adequately resourced and staffed by competent individuals, be independent of the day-to-day activities
1Paragraph 7BA – Position management(1)A [UK RIE] operating a trading venue which trades commodity derivatives must apply position management controls on that venue, which must at least enable the [UK RIE] to -(a)monitor the open interest positions of persons; (b)access information, including all relevant documentation, from persons about-(i)the size and purpose of a position or exposure entered into; (ii)any beneficial or underlying owners;(iii)any concert arrangements; and(iv)any
The recognition requirements in respect of position management and position reporting set out in REC 2.7A.1UK apply to a UK RIE operating a trading venue. An investment firm operating a trading venue which trades:(1) commodity derivatives must apply position management controls on that venue in accordance with MAR 10.3.(2) commodity derivatives or emission allowances must provide position reports in accordance with MAR 10.4.
(1) A Chief Risk Officer should:(a) be accountable to the firm'sgoverning body for oversight of firm-wide risk management;(b) be fully independent of a firm's individual business units;(c) have sufficient authority, stature and resources for the effective execution of his responsibilities; (d) have unfettered access to any parts of the firm's business capable of having an impact on the firm's risk profile; (e) ensure that the data used by the firm to assess its risks are fit for
(1) The Chief Risk Officer should be accountable to a firm'sgoverning body.(2) The FCA9 recognises that in addition to the Chief Risk Officers primary accountability to the governing body, an executive reporting line will be necessary for operational purposes. Accordingly, to the extent necessary for effective operational management, the Chief Risk Officer should report into a very senior executive level in the firm. In practice, the FCA9 expects this will be to the chief executive,
Where the skilled person is appointed by the person in SUP 5.2.1 G or SUP 5.2.2 G, the FCA1 will normally require the skilled person to be appointed to report to the FCA1 through that person. In the normal course of events the FCA1 expects that the person in SUP 5.2.1 G or SUP 5.2.2 G2 will be given the opportunity to provide written comments on the report or the collection of the relevant information prior to its submission to the FCA1. 222222222
The rules in SUP 16.14 provide that CASS large firms and CASS medium firms must report to the FCA in relation to the identity of the entities with which they deposit client money and the amounts of client money deposited with those entities. The FCA will use that information to monitor compliance with the diversification rule in CASS 7.13.20 R.
(1) In addition to the requirement under CASS 7.13.57 R, before adopting the alternative approach, a firm must send a written report to the FCA prepared by an independent auditor of the firm in line with a reasonable assurance engagement, stating the matters set out in (2).(2) The written report in (1) must state whether, in the auditor's opinion:(a) the firm's systems and controls are suitably designed to enable it to comply with CASS 7.13.62 R to CASS 7.13.65 R; and(b) the firm's
A firm that uses the alternative approach must not materially change how it will calculate and maintain the alternative approach mandatory prudent segregation amount under CASS 7.13.65 R unless:(1) an auditor of the firm has prepared a report that complies with the requirements in CASS 7.13.58 R (2)(b) in respect of the firm's proposed changes; and (2) the firm provides a copy of the report prepared by the auditor under (a) to the FCA before implementing the change.
Following discussions with the firm on the items listed in IFPRU 2.3.27 G, the FCA may put in place additional reporting arrangements to monitor the firm's use of its capital planning buffer in accordance with the plan referred to in IFPRU 2.3.27 G (3). The FCA may also identify specific trigger points as the capital planning buffer is being used up by the firm, which could lead to additional supervisory actions.
If a firm's internal model makes explicit or implicit assumptions in relation to correlations within or between risk types, or diversification benefits between business types, the firm should be able to explain to the FCA, with the support of empirical evidence, the basis of those assumptions.
A firm should carry out an ILAA at least annually, or more frequently if changes in its business or strategy or the nature, scale or complexity of its activities or the operational environment suggest that the current level of liquidity resources is no longer adequate. A firm should expect that its usual supervisory contact at the appropriate regulator will ask for the ILAA to be submitted as part of the ongoing supervisory process.
A firm should also be mindful that its retail funding profile is unlikely to be constant. In carrying out its ILAA, a firm should have regard to any changes to its retail funding profile since the previous ILAA and also to the possible impact of any future changes on its ability to maintain retail funding during periods of stress. In its ILAA submission to the appropriate regulator, a firm should include an analysis of:(1) its retail funding profile as at the date of its ILAA;(2)
A firm must, as part of its ILAA submission to the appropriate regulator, in relation to each currency in which it has significant positions:(1) identify the type of financial instruments which that firm uses to raise funding in that currency;(2) identify the main counterparties which provide funding to that firm in that currency; and(3) describe the arrangements that it has in place to fund net outflows in that currency on a timely basis.
There may be matters relating to the scheme or the parties to the transfer that the regulators wish7 to draw to the attention of the independent expert. The regulators7 may also wish the report to address particular issues. The independent expert should therefore contact the regulators7 at an early stage to establish whether there are such matters or issues. The independent expert should form his own opinion on such issues, which may differ from the opinion of the regulators7
For a scheme involving long-term insurance business, the report should:(1) describe the effect of the scheme on the nature and value of any rights of policyholders to participate in profits;(2) if any such rights will be diluted by the scheme, how any compensation offered to policyholders as a group (such as the injection of funds, allocation of shares, or cash payments) compares with the value of that dilution, and whether the extent and method of its proposed division is equitable
7When assessing a proposed scheme under Part VII of the Act each regulator will, taking into account all relevant matters in each case, consider whether it should provide a report to the court. As it will lead the Part VII process for insurance business transfers, the PRA will usually provide such a report.
1A firm must(1) report to the FCA any:(a) significant breaches of the firm’s rules; (b) disorderly trading conditions; (c) conduct that may involve market abuse; and (d) system disruptions in relation to a financial instrument; (2) supply the information required under this rule without delay to the FCA and any other authority competent for the investigation and prosecution of market abuse; and (3) provide full assistance to the FCA, and any other authority competent for the
1A firm should ensure that:(1) it considers the draft client assets report provided to the firm by its auditor in accordance with SUP 3.10.8DR (1) in order to provide an explanation of: (a) the circumstances that gave rise to each of the breaches identified in the draft report; and(b) any remedial actions that it has undertaken or plans to undertake to correct those breaches; and(2) the explanation provided in accordance with (1):(a) is submitted to its auditor in a timely fashion
2Information may also be provided to the FCA voluntarily. For example, firms may at times commission an internal investigation or a report from an external law firm or other professional adviser and decide to pass a copy of this report to the FCA. Such reports can be very helpful for the FCA in circumstances where enforcement action is anticipated or underway. The FCA's approach to using firm-commissioned reports in an enforcement context is set out at the end of this chapter.
Firms are reminded that: (1) requirements relating to the systems and controls which firms must establish and maintain for ensuring compliance with financial resources and other requirements are set out in SYSC. (2) the financial reports that a firm is required to make to the FCA are set out in SUP 16.
The purpose of REC 3.16 is to ensure that the FCA1receives a copy of the UK recognised body's plans and arrangements for ensuring business continuity if there are major problems with its computer systems. The FCA1does not need to be notified of minor revisions to, or updating of, the documents containing a UK recognised body's business continuity plan (for example, changes to contact names or telephone numbers). [Note:MiFID RTS 7 requires that the operator of a trading venue assess
(1) In order to discharge its functions under the Act, the FCA1 needs timely and accurate information about firms. The provision of this information on a regular basis enables the FCA1 to build up over time a picture of firms' circumstances and behaviour.555(2) Principle 11 requires a firm to deal with its regulators in an open and cooperative way, and to disclose to the FCA1 appropriately anything relating to the firm of which the FCA1 would reasonably expect notice. The reporting
However, the FCA3 also expects that UK recognised bodies will keep it informed of all significant developments and of progress with their 2plans and operational initiatives, and will provide it with appropriate assurance that the recognised body requirements21 will continue to be satisfied. 322
(1) Where a firm receives less than 500 complaints in a reporting period, Part A-1 of DISP 1 Annex 1 requires, for the relevant reporting period and in respect of particular categories of products:10(a) in Table 1, information about the total number of complaints received by the firm and the cause of the complaint;10(b) in Table 2, information about the number of complaints that were:10(i) closed or upheld within different periods of time; and10(ii) the total amount of redress
Part B of DISP 1 Annex 1R requires (for the relevant reporting period) information about:10616(1) the total number of complaints received by the firm;10(2) the total number of complaints closed by the firm;10(3) the total number of complaints:10(a) upheld by the firm in the reporting period; and10(b) outstanding at the beginning of the reporting period; and10(4) the total amount of redress paid in respect of complaints during the reporting period.10