S166 Information
In 2009/2010 there were 88 completed FSMA Section 166 Reports issued by the Financial Services Authority (FSA) costing a total of £24,800,000. Compare this to 2005/2006 when 17 reports were completed at a total cost of £3,700,000 and you will see the average case has escalated in cost, mainly due to the big consultancies charging into the area with their large teams of analysts and managers.
In 2009/2010 the largest single cost case totalled £4,400,000 which leaves the average of the other 87 cases being over £128,000 each. The good news is the cheapest cost was for a one man band at £3,000.
This does not include the additional costs incurred when the original consultancy failed to deliver and a further consultancy was engaged.
The areas covered in the latest year‚s S166 reports were Client Money, Corporate Governance, Past Business Reviews, TCF, Systems and Controls, Capital adequacy, Regulatory Reporting and Market Abuse.
Adair Turner, Chairman, FSA announced at the British Bankers’ Association (BBA) Conference 13 July 2010
Download our FREE Guide Here
"Our new approach involves a more pre-emptive and intrusive approach to supervision:
- To spot risk earlier we have established a horizon-scanning function, analysing trends in the economic and market environment to identify potential risks to consumers. This autumn we will set out our view on these risks in our new Conduct Risk Outlook.
- We are examining firms’ business models – following the money – to understand the drivers of profitability and the implications of firms’ strategies. And as part of this work later this year we will scrutinise reward structures for in-house sales staff, to assess whether sales incentives are well-designed to guard against mis-selling.
- We are looking at whether firms have product development and approval processes well-designed to weed out harmful or inappropriately marketed products.
- And where we find incentives, structures or products that are likely to lead to poor customer outcomes, we will take tough action, includin using our enforcement powers, to ensure that customers are protected."
So does the FSA have the right to appoint the big accountancy firms? The simple answer is yes.
Normally this would be preceded with a S165 request for information of a type or sort and at a place stipulated and then, under S166 of FSMA 2000, can then nominate a person to make a report who, in the authority’s view, has the skills necessary to make a report on the matter concerned.
So you have been in discussion with the FSA and they have asked you to provide names for a S166 Report, so that they can select a company for you to use. Do not prevaricate or procrastinate. Failure to comply with requests (often within 3 working days) can be seen as a breach of Principle 11 and APER Principle 4 (EG 4.11) and seen as non-cooperation.
Call 07092 289901 Now to arrange a free quotation
If you have any query at all, Email us at Email Us NOW!
If there are specific capital adequacy or finance control areas, they will obviously plump for an accountancy based firm. If they are concerned about sales, general compliance, money laundering, complaints, TCF, governance, systems and controls or past business reviews, the big four would be overkill and the details can be handled by specialist consultancy companies like CEI Compliance.
What can we offer? We do not keep staff around in case of suitable work and deploy them when the need arises, we only use experienced and qualified compliance staff that are specific to the project needs. There will only be the required people working on the report that needs to be there at any one time and there will be no superfluous managers or partners milling about.
Most Importantly: The first thing that you need to do is issue a companywide document preservation order, this ensures that everyone knows not to delete, destroy, shred or in any way dispose of any document that may help you in your position. Under Section 177 it can be a criminal offence if a person destroys any documents suspecting an investigation.
Call 07092 289901 Now to arrange a free quotation
If you have any query at all, Email us at Email Us NOW!
Once you appoint us, we will discuss with you and the FSA the scope of the document and iron out any wrinkles. We will identify the initial documents required as best we can and make any preparations for the additional resource we have allocated so that they can start immediately on day 1 to conduct their part of the work efficiently and effectively.
Call 07092 289901 Now to arrange a free quotation
If you have any query at all, Email us at Email Us NOW!
For Your Compliance Needs CEI Compliance has the answer, Your Compliance Partner. We are in business to help make your business more successful.Our skilled and experienced business consultants are committed to making your organisation more successful by providing you with the type of service you would want with honesty and integrity.
At CEI we always try to understand your business, provide you with workable solutions, test the in-situ processes and any changes and identify the best ways to report to you the operational performance and risk indicators. We will work with you to discover new business possibilities, options and solutions that will move you forward and improve your performance.
CEI is a people based consultancy, run by real people for real people, and we take this approach throughout the work that we do. We work on issues and demand areas, delivering performance improvements, process enhancements or additional support where it matters most.