s166 skilled persons appointments under FSMA 2000
Section 166 of the Financial Services and Markets Act gives the FCA the power to commission reports by “Skilled Persons” in order to obtain an independent view of any aspect of a firm’s activities.
The FCA uses s166 reports for various purposes, including:
- Diagnostic – to find out more about a particular concern, perhaps as a result of a thematic visit, risk assessment or notification and to determine whether further regulatory action is required.
- Monitoring – to review the company’s systems and controls.
- Preventative – to gather and analyse information on an identified risk, such as concerns over the company’s financial crime risk management, and to develop recommendations for a resolution.
- Remedial – to help develop, oversee and report on the implementation of a remedial action plan or assist in the design of a customer redress programme.
How can these issues affect your organisation?
It’s crucial that you respond to a s166 Requirement Notice in a timely manner and that you liaise appropriately with the FCA during the course of the process. If your organisation doesn’t do this, your relationship with the FCA could be adversely affected. It’s important to get it right, because the Report and recommendations provided by the Skilled Person will also help the FCA to determine:
- FCA supervision going forward.
- Whether enforcement action should be taken against a firm or individuals.
- Whether a post s166 review should be conducted to ensure any improvements / recommendations have been implemented.
How can we help?
The Deloitte team has experience of conducting s166 Reports in the financial services sector. That means we’re ideally placed to assist clients as they work with their legal advisers. We will liaise with the FCA to make sure that the work is performed to the highest standard and that it provides clear, tailored recommendations.
Our work may include:
- Working independently or with other Deloitte teams such as Risk and Regulation, and Banking & Capital Markets to prepare a s166 Report.
- Conducting interviews.
- Undertaking email and document reviews to provide documentary evidence to support findings.
- Undertaking due diligence for risk identification and assessment.
- Follow-up on remedial action taken previously.
- Ongoing communication with the FCA.