FCA Supervision & Reporting
In exercise of its functions under FSMA, the FCA takes a proactive approach to monitoring markets and engaging with the firms it regulates. The regulatory process by which this is carried out is referred to as ‘supervision’. Although linked, supervision is not the same as regulation. Regulation relates to the FCA’s legal framework, rules and regulatory standards that govern the way in which regulated firms operate. Supervision is effectively the proactive pursuit of the FCA’s statutory objectives, through oversight of the conduct by firms of regulated activities. Under its supervisory function, the FCA requires timely and accurate information about the firms it regulates. Regulated firms are therefore required, under FCA rules, to provide the FCA with substantial amounts of information in the form of ‘notifications’ and ‘regulatory reports’ (known as ‘integrated regulatory reporting’) to enable it to meet its responsibilities for monitoring the firm’s compliance with requirements imposed by or under FSMA.
The FCA aim is to supervise the credit market in a proportionate way. The FCA categorise firms based on certain criteria such as the size of the firm, the number of customers and the perceived risk to the consumers from the firm’s activities. The designated ‘conduct category’ determines the way the FCA supervises the firm under its three-pillar supervision model, and the intensity of the supervision. The FCA supervision teams have more contact and interaction with higher-risk firms that have a significant impact on the market. Lower-risk firms that have less of an impact are supervised in a more proportionate way.
Once a firm is fully authorised the FCA require it to begin reporting information to them online, on a regular basis – either six monthly or annually depending on the nature and size of the business. The regulatory returns, by design, collect the information that the FCA needs to perform what is known as adequate ‘baseline monitoring’ at a firm-specific and industry level. Baseline monitoring of regulatory returns forms part of the Pillar 2 ‘Event-driven work’ (reactive supervision), of its three-pillar supervision model and involves the FCA reviewing the regulatory data that firms have collated and submitted.
FCA’s supervision regime including its three-pillar supervision model
consumer credit related integrated regulatory reporting requirements
practical explanations of the data items applicable to the activities consumer credit firms undertake as set out in the FCA supervision manual under SUP 16 Annex 38A.
To provide attendees with a practical understanding of:
the FCA’s supervision regime including how its supervision model relates to consumer credit
the FCA’s integrated regulatory reporting requirements including the scope of rep
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Course Title: FCA Supervision & Reporting