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FSA in the spotlight: Remind yourself of your seven FSA assurances

On submitting their application for authorisation to the FSA, dealer principals make a number of assurances to the regulator to which they will comply on the date of authorisation.

For the majority of currently authorised dealerships, this date was January 14, 2005. Failure to make good on these assurances opens the dealer to potential penalties from the regulator.

There are seven assurances authorised dealerships gave to the FSA. These were: senior management arrangements systems and controls (SYSC); training and competence; complaints; insurance mediation directive (IMD) requirements; professional indemnity insurance (PII); client money and assets; and capital resources.

“To deliver on these assurances dealers need to consider whether they have appropriate processes and procedures in place to support and maintain compliance,” says Stephanie Murdoch, managing director of Auto Network UK.

“These also include having appropriate procedures for the apportionment and oversight of regulated activities by senior management; adequate risk management controls; effective financial procedures and controls both for the business and if handling client money; recruitment policies; sales and marketing controls and procedures; transparent claims processes.”

Murdoch stresses that dealers should see compliance as a sales asset and not a burden. It is something to be embraced and used to your commercial advantage, rather then be avoided and resented. The FSA regulations should be viewed as a framework and it is up to dealers to incorporate this framework into their individual businesses as it will ensure best practice as a result.

This is where employing external professional help can be a valid and a valuable investment. Murdoch says: “Compliance is not impossible. It should be regarded as formalising those best business practices that many dealerships have had in place for years. Evidencing that these processes have been put in place, and are being followed, is often the biggest challenge we help overcome when working with dealers.”

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