Visits by the Financial Conduct Authority (the FCA) aren’t as common as they were pre-Covid but they still take place, usually as part of a thematic or sector review. They can be in-person (at a firm’s offices) or take place remotely. They might involve interviews of senior staff (not necessarily SMR senior managers) but there’s generally a strong focus on meeting people who deal with customers. A visit and related review might be highly focused and be completed quickly, but it’s quite possible that there will be a broad remit with work running over many months.
Once the first round of Consumer Duty annual reports is available, expect the FCA to request copies and use those to identify firms and topics to review. Visits might well follow and I’m setting out, below, some points to consider for those or other FCA visits.
1 Make sure the FCA understands your business – this is a common issue. FCA supervisors move around the organisation and the people you deal with might know very little about your business and the sector in which you operate. That means there’s scope for misunderstandings that can be hard to spot until they’re a problem. When sending any pre-visit documents or information to the FCA make sure you provide an overview of the business, explain any technical or in-house terminology and describe internal systems and governance arrangements. And consider providing a brief presentation to the FCA at the start of a visit.
2 Keep any presentation short – the FCA has a known aversion to lengthy presentations at a visit (or, for that matter, a meeting). They’ve asked for the visit (or called for, or given time for, a meeting) and they have points they want to get through. A presentation can throw plans off course. Aim for no more than five minutes, on the basis it might overrun a bit but shouldn’t exceed ten minutes which is the absolute limit on how long the presentation can be.
3 Consider who the FCA needs to meet – org charts are usually provided to the FCA as part of the initial information request but they might have been sent some months before a visit and people might have moved to new roles or left the business by the time the visit takes place. Also, job titles can be open to interpretation and the FCA might not ask to see the most appropriate people to cover particular topics. There’s usually scope to suggest alternative people – always give reasons – and it’s quite common for the FCA to ask firms to suggest who the best people are to cover topics. Just don’t leave any suggestions or changes to the last minute.
4 Clarify the agenda – the agenda for a visit should provide a framework for how the day will proceed. Without clarity, a firm won’t necessarily have the right people available. Where a visit involves file or case reviews, those will need to be ready too. The FCA is generally amenable to clarifying what they’re looking to cover. If anything is unclear, ask – and do that as soon as you can after receiving the agenda.
5 File and case reviews: what’s needed? – this is a particularly important point to clarify because the files and cases will need to be set up, ready to access, and the right people will need to be available to take the FCA through them. By the time of the visit, you should know:
- Whether the FCA wants to go through cases it’s already received (under the pre-visit information request) or other cases and, if other cases, what those should cover; and
- If live cases are to be reviewed.
If these points aren’t clear, ask the FCA for clarification.
6 Selecting files and cases – where a firm has some discretion to select files or cases, the key points are:
- Don’t cherry-pick – it’ll be spotted and it’ll backfire;
- Have plenty of files or cases available in case the FCA runs through them quickly; and
- Know the cases and have practised running through them; know the key points on each one in the context of the regulatory framework and the agenda for the visit.
7 Practise file or case run-throughs – you want the person presenting a file or case to be comfortable and confident when they meet the FCA and comfort and confidence come from practice. So:
- Anyone presenting a file or case should be familiar with that and should have experience of someone they don’t know asking questions about the case, decisions taken and so forth; and
- It’s important to be comfortable with logging into and moving between systems and apps when under pressure to bring up the right page.
Anyone who’s to work through a live case for the FCA should also practise on other live cases before the visit.
8 Take care when setting up the tech and accessing systems – the key points are that all systems and applications that are needed for a file or case run-through should be open and everything else (including notifications) should be closed. You don’t want Slack messages appearing on-screen during a file or case run-through, the FCA doesn’t need to see anyone’s email inbox and care is needed to protect personal information. Check, too, that all systems and applications to be used by those presenting are available, that each person can log in to the systems they need and that logging in doesn’t result in notifications and applications that aren’t relevant appearing on-screen.
9 Identify the questions that might be asked and be prepared to answer those – this applies to file and case run-throughs and to other meetings during the visit. Have a list of questions that might be asked, think about answers and consider what they say about the firm and how it does business.
10 Identify the points you want to make at the visit – at a visit, firms have an opportunity to present points they want to make, messages they want to give. Have those ready and consider how they can be made and who is best-placed to do that.
11 Have notetakers – you’ll need a record of what’s asked, what’s said and any follow-up points or points that might be picked up later in the visit. You’ll need at least two notetakers – it’s a tiring job. And this is old-school pen and paper – tapping on a keyboard risks annoying those in the meeting and distracting co-workers presenting to the FCA.
This article is intended to provide general information about recent and expected items that might be of interest. It does not provide or constitute, or purport to provide or constitute, advice relevant to any particular circumstances. Legal or other professional advice relevant to any particular circumstances should always be sought.