Mock Regulatory Inspections and Compliance Assurance Reviews

Cordium regularly undertakes mock regulatory inspections or compliance assurance reviews for clients. The driver for each review can be very different. Recent regulatory interaction in another jurisdiction, an absence for a significant period of any regulatory interaction, changes in senior management, a “near-miss” regulatory breach or failure in key controls or simply time for an independent review and assessment.

Cordium has completed regulatory assessments at all manner of firms, alternative managers, brokers, OPS managers, wealth managers, real estate investment managers, long-only managers, and we also deliver compliance monitoring programmes for large managers on a co-sourced basis.

We will interview senior management, assess processes and procedures for compliance with FCA rule requirements and undertake detailed testing. We follow with or can tailor a comprehensive risk assessment programme, that seeks to focus on the areas we evaluate to be of highest regulatory risk and of potential interest to the regulator.

These reviews can be conducted on stand-alone UK basis or on conjunction with our international colleagues covering requirements in other jurisdictions. We run these reviews independently or, with larger firms, on co-share basis.

Click here for a case study on a co-sourced compliance monitoring project that we carried out.

Skilled Persons Reviews

Skilled person reviews are commissioned by the regulator when it has concerns about a firm’s conduct or governance and is seeking to establish whether the firm requires remediation and / or enforcement action. The FCA has been encouraged to use its powers under Section 166 of the Financial Services and Markets Act to commission these reviews which the firm pays for.

These reviews place the consulting firms in a position of potential conflict as, on the one hand the consulting firm is acting for the regulator and on the other it is working for one or more clients. This conflict can materialise as simply as in the level of fees paid when the regulator commissions the work as opposed to when the work is contracted privately.

Cordium believes that prevention is better and our service proposition is based on giving clients to tools and advice that ensures they operate on the right side of the regulator. We will therefore help firms remediate policies, procedures and practices to help prevent a skilled person review being commissioned, we will undertake assessment reviews to identify weaknesses that could potentially lead to skilled person action and provide remediation proposals and we will assist with remediation after a skilled person review undertaken by another firm at the FSA’s request. Our philosophy is to do the right thing for our clients at all times.

One area where Cordium has provided extensive remediation support is with respect to the benchmarking of a leading UK asset manager’s KYC arrangements to the FSA’s expectations and suitability requirements. We provided an independent challenge to the quality of information the firm retained and helped define the control infrastructure that would operate going forward, to provide greater transparency and structure to the Firm’s client information arrangements. Click here to learn more about the work we carried out.