If you follow regulatory news, you will understand the FCA releases news of final notices and fines issued on firms and individuals that have breached its rules.
What is an FCA Final Notice?
The FCA uses a wide range of enforcement powers – criminal, civil and regulatory – to protect consumers and act against firms and individuals that don’t meet its standards.
This enforcement involves a multitude of ways to target a firm/ and or individual(s) and this includes a final notice. When the FCA has decided to take action against a firm or individual it will issue a Final Notice.
Some recent examples:
GAM International- fined £9,103,523 due to breaches of PRIN 2 and 8 related to the management of conflicts of interest
Barclays Bank- fined £783,800 due to breaches of PRIN 2 related to financial crime
Simon John Varley- fined £68,300 due to breaches relating to APER 1 and FIT relating to a lack of honesty and integrity
What can you do to avoid a Final Notice?
At MEMA we have conducted research into the majority of the final notices issued by the FCA. For one, Final Notices are typically issued by the FCA for breaches of the FCA Principles of Business (PRIN).
We pick out a few common trends that you ensure your team remain cognisant of:
respond on time to requests for information from the FCA
ensure your responses are detailed, clear and remain consistent with the threshold conditions covering Location of offices, Effective supervision, Appropriate resources, Suitability and Business model
engage with the FCA in an open and cooperative way
comply with all regulations
take particular adherence to your financial crime controls and policies
review how are your communications with customers, including complaints
ensure your policies are designed to Treat Customers Fairly
ensure your senior leaders are aware of and are managing any potential conflicts of interest
These are just some popular trends we noted, however, it remains important that you and your team review and update your firm's internal controls and policies to ensure they address and monitor regulatory and compliance risks.
Please note, that we have released a guide on our homepage, Preparing for an FCA visit, that provides more clarity on how to address some o the issues noted above.
How can MEMA help
If you have any questions on steps to review and monitor your internal controls and potentially avoid a Final Notice, reach out to our expert team. We are here to help you every step of the way.