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FSA gets tough on individuals

The FSA (Financial Services Authority) has published its 2010/11 Business Plan detailing a change in tact from retrospective intervention to proactive challenge through a more intensive and intrusive supervisory approach.

The plan also outlines the FSA's intention to be more judgmental on individuals performing key roles and the sustainability of a firm’s business model.

The overall aim of the FSA is to intervene much earlier than before if risks are anticipated or identified arising from a firm's conduct, financial stability, selling practices, senior management competence or product development.

In 2009 there were 24 fines against firms: 18 fines against individuals, in 2010 so far there have been four fines against firms: 11 fines against individuals and seven arrests (for market abuse).

Understandably there is a significant focus on large firms but small firms have not fallen off their radar.

Increased scrutiny on small firms using more sophisticated analytical systems is promised.

"You should focus on the accuracy and timely submission of your RMAR returns (RMAR is an electronic return for the collection of information required by the FSA as a basis for its supervision activities) being able to evidence, how you have embraced TCF across your business, that standards of advice are meeting the needs of customers, product knowledge for advisors is up to date, management controls are in place and that you are being ‘open’ with the regulator," says Stephanie Murdoch from the Alliance Consultancy.

"Other points of note include the publication by the FSA of a further consultation paper on the selling of Payment Protection Insurance and, the Financial Ombudsman Service has published a new process for the handling of PPI customer complaints for both firms and customers to follow."

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