Has Christmas has landed early for those nice people at the FCA? They’ve started issuing invitations!


These invitations aren’t for drinks and canapes at 12 Endeavour Square of course, they’re requests for firms to complete surveys. And they are being issued under Section 165 of FSMA.

For those who aren’t aware what S165 requests are, they’re one of the tools that the regulator possesses that allows them to require Authorised Persons (firms) to provide information within a specified timeframe and because they’re enshrined within FSMA, failure to comply is unwise – as unwise as asking that nice Mr Foxy-Woxy to look after your chickens while you’re away for the weekend.

We’ve commented regularly this year that we think that the FCA will be targeting firms who they have had little or no contact previously, and just this week evidence of this emerged, when one of our firms received an unsolicited email from the regulator. The email told the firm that they will shortly receive a mandatory request to complete an online survey. You can imagine how they feel about that. Probably as welcome as Mr Fox in the chicken coup!

The regulator has issued a few surveys this year, on various subjects (our regular readers will recall that we’ve highlighted this on more than one occasion), with the Retirement Income Advice thematic review perhaps being the most obvious of these. Completion of most of those thus far has been voluntary (although it wasn’t always immediately apparent that this was the case, and firms that failed to respond may well have involuntarily placed themselves on the naughty step as a result), but like the one issued to Principals of AR firms late last year, this latest request is not optional, it’s mandatory.

We don’t yet know what the content will be (we’ll report back on this of course), but those who logged in for the FCA’s Consumer Duty webinar on 6th December (you didn’t!?) will have noted that MI and data were mentioned numerous times. These requests for information are becoming more frequent and it appears, increasingly demanding in terms of the material that firms are being asked to provide. The FCS promised that they’d be more intrusive and they’re true to their word in that regard.

What really brought the message home was that this firm that has not previously had any interaction with the FCA and this wasn’t just an open invitation, it was a ‘complete it or else’ demand. How long before similar ‘invitations’ start appearing in the inboxes of other firms that have not been contacted previously?

The majority of firms we deal with should have little to fear because they engage third party support, get their files checked, have annual audits and act upon the feedback they receive, but there are many out there who simply bury their heads in the sand and pretend they can carry on as normal because they’re convinced that they do everything well. If they receive one of these ‘invitations’ that may make them think again.

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Our View

We don’t keep highlighting this sort of thing for the fun of it. The regulator is becoming far more proactive and intrusive and is targeting firms with which it hasn’t previously had any contact. Firms that are well run, and importantly, have the evidence to prove it, are probably in a good place. In its Consumer Duty webinar the FCA openly told firms to concentrate on getting things right first time. In our view this makes sense, as in the long run it costs more to put things right after the event. Making sure that your ducks are in a line is the right thing to do, but so many firms wait until the eleventh hour before doing so and more still have done little or nothing since RDR. Anyone who thinks that change only affects other people is just fooling themselves. We’ve commented about the level of detail that firms are being asked to provide more than once. If your firm receives a request and you can’t provide the answers you can’t say that you haven’t been warned!

Action Required By You

If your firm might not be able to provide the necessary MI and data that the FCA is increasingly asking for, or you haven’t had someone cast an eye over your firm’s activities will it take a request like one of these to get your attention? An audit could show you if you have any blind spots and help put things right before you’re asked by the regulator. If your firm hasn’t had an audit or may have problems if one these requests lands, then please contact us. We can provide honest, pragmatic solutions in language you can understand.
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About the Author

Paul has in-depth experience across a wide spectrum, having headed up compliance, T&C, monitoring, oversight and MLRO functions previously. He was also an IFA for some time so can see things from more than one angle.

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