SMALL FIRMS REGIONAL ASSESSMENTS

The Financial Services Authority (FSA) announced in 2007 that it intended to give more help to small firms through its Enhanced Small Firms Strategy. From 2008 to 2011 the FSA intends to see every small mortgage intermediary firm and IFA on a face to face basis to assess compliance with mortgage regulation, suggesting ways compliance could be improved and asking for remedial action to take place if non compliance is found.

The Telos Compliance service can help in every stage of getting prepared for the meeting and the fallout (if any) afterwards.

Through its contact with the regulator The Telos Compliance service has identified that compliance with mortgage regulation is one of the FSA's top priorities. They have even published their supervisory priorities in the small firms section of their website. Small firms have a turnover of less than £3m per annum and can include general insurance brokers, mortgage advisers, networks and Independent Financial Advisers as well as mortgage brokers.

The assessments are being conducted on a region by region basis. There is information on the FSA site. Initial contact will be via a recorded delivery letter inviting the firm to a regional roadshow. If you do not respond to this invitation you will receive a phone call asking for an explanation and inviting you again.

At the roadshow there are useful descriptions of what is required and expected and many delegates leaving the roadshows have found them very useful and informative. Telos thoroughly recommends the value in taking the time to attend a regional roadshow.

After the roadshow you may be invited to an individual assessment meeting where the FSA hire a local venue and invite you to go armed with evidence about your compliance and a demonstration of your adherence to the Treating Customers Fairly (TCF) regime. Occasionally the FSA may request a visit to your premises. At either of these meetings a risk based assessment will be made concluding whether a further visit to your firm is required.

The Telos Compliance service can help you prepare for these assessments, using specialist skilled individuals who have experience in mortgage related assessments.

It is very important to prepare well for a visit. See preparing for an FSA visit for more information.

Should the visits find remedial action necessary the FSA will write confirming the areas that need addressing. On occasion there will be no follow up inspection, only the expectation that the remedial action will be undertaken. Any future assessments made by the regulator will include a check to make sure this work has been done.

If the remedial action required is more serious then the letter will confirm the regulator's intention to revisit once the remedial work has been done.

If very serious action needs to be taken the FSA can asked for a Skilled Persons Report (SPR) under section 166 of the FSMA. There are very few skilled persons who have the mortgage and general insurance experience that can undertake this type of work. The Telos Compliance service is able to provide experts who more than satisfy the requirements and who are experienced practitioners in the Mortgage & General Insurance markets.