FSA sets out how FCA will supervise small firms

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The FSA says the incoming Financial Conduct Authority will have “touch point” contact with all adviser firms at least once every four years with firms viewed as higher-risk facing face-to-face interviews.

In its Journey to the FCA document, published today, the regulator says it intends the FCA to have contact through roadshows, interviews, telephone calls, online assessments or a combination of those options.

The nature of the interaction with firms will depend on the level of risk that firm is seen to pose by the regulator. Firms deemed to be high-risk and around 25 per cent of firms deemed medium-high risk will have a face-to-face interview and supervisory visit if they are still deemed high-risk after follow-up work.

The FCA will use risk-profiling tools based on online reports submitted to filing system Gabriel and information recorded by the FCA during firm visits to determine risk levels.

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The document sets out that intermediary firms will be classed in supervision category C4 which means they will be supervised by a team of sector specialists rather than a nominated supervisor.

The document says: “We intend having a ‘touch point’ with all C4 firms once every four years. The exact interaction will depend on our assessment of the risk such firms pose to our objectives. Those deemed to be lower risk may only be required to complete a formal online assessment once every four years. We will carry out visits to some of these firms to verify the results of this assessment.”

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