Senior management must not lose sight of the importance of the regular interaction and communication they should have with the FSA. These may come about as a result of either regular reporting requirements such as the new RMAR, complaints reporting or special notifications that may be necessary where errors have happened, plus those situations where they have to communicate with FSA staff face to face in situations such as Arrow visits and even as part of relationship building with FSA staff.

How a organisation chooses to manage its relationship with the FSA and in particular it’s FSA supervision team can have a significant impact on the FSA perception of the strengths of the organisation and how it chooses to manage its dealings with the organisation. A strong and positive relationship with the FSA can lead to a trusting, cooperative relationship which is a significant benefit if and when potential problems arise. Senior management must consider methods that may be utilised to manage and promote an organisation’s relationship with the FSA.

The FSA provide guidance in SUP 15.3.8G of the types of matters that should be disclosed to ensure compliance with Principle 11. These include:

• any proposed restructuring, reorganisation or business expansion which could have a significant impact on the organisation’s  risk profile or resources, such as  setting up a new undertaking within a organisation’s group, or a new branch (whether in the United Kingdom or overseas), commencing the provision of a new type of product or service, entering into, or significantly changing, a material outsourcing arrangement;
• any significant failure in the organisation’s systems or controls, including those reported to the organisation by the organisation’s auditor;
• any action which a organisation proposes to take which would result in a material change in its capital adequacy or solvency.

Moreover, general and specific notification obligations are set out in the FSA’s Supervision sourcebook. A series of general notification requirements is provided in relation to:

• Matters that might have a serious regulatory impact
• Breaches of FSA rules and the Act
• Civil, criminal and regulatory proceedings
• Fraud and irregularities
• Insolvency, bankruptcy and winding up

Each of these matters may be classified as issues that if left unattended may increase the risk the organisation presents to the FSA Statutory objectives, potentially resulting in careful regulator scrutiny and possibly intervention.

How we can help

• Provide induction, ongoing or remedial training and coaching to your staff on the latest regulatory reporting requirements and how they impact on doing business,
• Review you current programme for regulator relations and advise you on how that programme might be enhanced to better support your business,
• Review your current regulatory reporting systems and controls and advise on how they might be strengthened,
• Review your current arrangements for identifying rule breaches,
• We can supply you with interim/ seconded compliance resource to support your compliance function in monitoring and investigation rule breaches and compiling appropriate rule breach reports.