Business Plan
We have a busy programme of work to ensure we drive up the standards of Wholesale small firms.
We aim to do this in two ways. As part of the enhanced strategy for small firms we are increasing our supervision of – and contact with – Wholesale small firms to help them 'up the pace of change', and we will undertake a range of related thematic projects.
Principles based regulation will assume more importance and relevance in turbulent times when the environment that firms face can change quickly. Firms should expect that over the coming year we will be looking at how they ensure continued compliance with our 11 Principles for Businesses. Given the outlook for a more testing financial and economic environment, for many small firms Principles 3 ('A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.') and 4 ('A firm must maintain adequate financial resources.') will assume heightened importance. In addition, turbulent times also make it all the more important that firms continue to deal with us in an open and cooperative way, as required by Principle 11, continuing to notify us of anything we could reasonably expect to be told.
Our work on implementing the Markets in Financial Instruments Directive (MiFID) and the Capital Requirements Directive (CRD) remains important, although with a shift in emphasis towards ensuring that firms have implemented the requirements appropriately. From 1 January 2008, all firms affected by the CRD must have carried out an Internal Capital Adequacy Assessment Programme (ICAAP). The CRD requires us to conduct a supervisory review of firms’ ICAAPs. Through 2008/09, the review of ICAAP applications will be an important element in our supervisory programme. For small firms we will generally do this through the regulatory returns.
One of the priorities unique to small firms for the coming year, is improving the quality and accuracy of regulatory returns. The regulatory information we receive is key in identifying risks, so it is important that we receive timely and accurate returns. It should be noted that firms that fail to submit or persistently submit inaccurate regulatory returns will be subject to closer supervision.
Our new strategic electronic reporting system – GAthering Better Regulatory Information ELectronically (GABRIEL) – will be launched during the second half of 2008. It will offer firms more choice of the means of submitting information to the FSA and improved functionality, compared to the present Firms Online system and legacy systems that it will replace. This will allow the FSA to collect and validate the data firms submit in the most efficient and effective way for us and for you.