Managing regulatory intervention and running a business at the same time is a difficult task and should not be underestimated.
It’s crucial that you respond to a remediation request or s166 Requirement Notice in a timely manner and that you liaise appropriately with the regulator during the course of the process.
Getting the initial response right will determine:
- Supervision going forward.
- Whether enforcement action should be taken against the firm or individuals.
- Whether a post s166 review should be conducted.
BAU will suffer, but engaging the right help, up front will see you through this challenging time.
STAYING ON THE FRONT FOOT
Regulatory supervision can quickly become intrusive oversight and then intervention. This always has an immense impact on a firm’s ability to carry out its business as usual, as senior management and key staff are removed from their daily jobs to respond to the demands of the regulator.
Most banks will be aware of the regulators’ box of supervisory tools, especially the one described under section 166 of the Financial Services and Markets Act (FSMA 2000) that gives the FCA and PRA the power to commission reports by “Skilled Persons” in order to obtain an independent view of any aspect of a firm’s activities. Furthermore, this investigation is carried out at the expense of the firm, but on behalf of the regulator and almost always results in a comprehensive list of findings and requirements.
With the costs of a section 166 spiraling (in 2013 they ranged from £33,795 to £3.0m per report) firms will want to do all they can to avoid losing control when the supervisor calls.
APPROACHING REGULATORY INTERVENTION SERIOUSLY
The Lysis team has experience of conducting s166 Reports in the financial services sector. That means we’re ideally placed to assist clients as they work to address remediation points from a regulator. We will liaise with both the firm and regulatory body to make sure that the work is performed to the highest standard and that it provides clear, tailored solutions.
Our work will include:
- Deep analysis of the recommendations and feedback from the regulator.
- Extraction and assessment of each point to form work packages.
- Development of individual remediation project(s) and overall program of work.
- Implementation of a remediation package, governance suite.
- Engaging specialist resources and project/program management to deliver each regulatory solution.
- Undertaking due diligence for risk identification and assessment.
- Follow-up on remedial action taken previously.
- Ongoing communication with the regulator.
- Tailored, package submission of each regulatory response with full evidence suite.
When under regulatory scrutiny, delivering on the commitments made to the regulator is critical, both to reduce the potential for further regulatory action and to build credibility with stakeholders, the regulator and senior management. Our consultants have the experience and program management tools to effectively deliver the change program that regulatory intervention will unquestionably demand. Lysis has delivered many regulatory remediation projects and has extensive resource and experience to ensure a smooth and successful outcome.
STEPS TO SUCCESS
We will engage with the Board and senior management to shape each project within the remediation program and then produce a detailed program plan which will provide the delivery roadmap for execution and reporting to the board and the regulator.
Establishing program governance, RAID Log and tracking tools provide the foundation for successful delivery. We build on that with a bespoke program and project delivery methodology to maintain absolute control over the goals and objectives.
We work with executive and senior management to initiate the program and projects, building the team required and responding to the initial FSA challenges by providing essential subject matter expertise and experience.
We manage the entire global program, spanning functions including Governance, Risk, Compliance, Operations and IT, typically reporting to a Board-level Steering Committee.
Our regulatory focused, diagnostic health check measures your readiness against the supervisory risk assessment model with particular focus on not just if you measure up, but also how you present your firm’s compliance to your supervisors.
- Structured and experienced response to regulatory intervention
- Expert and experienced support and guidance
- A full and detailed analysis of your current situation
- Gap analysis and clear change roadmap
- Templated and packaged response to each remedial action
- Delivery of all regulatory recommendations
- Removal from the watch list and a return to a regular footing with the regulator
- Improved operational framework and strategy execution
HOW WE WORK
Our remediation change roadmap delivers clearly defined, tangible results with a known duration and cost.
Beginning with an initial discovery phase, we work with you, understand and identify the gaps before setting out the steps to build the necessary capabilility and embedded process for permanent, long-term success.
Each phase is structured to meet key milestones and deliver specified outcomes. Our set programme removes the risk from you by removing the open ended doubt that surrounds so many traditional consultancy engagements, which can leave you with little more than a large bill and questions to answer.
We enable you to engage specialists to help overcome your challenges without the worry.
For the past 15 years, Lysis Financial has helped businesses reduce their operational losses, reduce the cost of borrowing (through enhanced credit ratings), and free up regulatory capital. Lysis embeds a risk-based strategic approach into its projects and operational decision-making, enabling our clients to be assured of sustainable success.