| Toolkit purpose | Purpose for use of tool | Examples of reasons for use of tool |
|---|---|---|
| Diagnostic | • To find out more about a concern (e.g. the result of a visit, risk assessment, or notification) and determine whether action is needed to mitigate a risk to the regulatory objectives or to determine whether there may have been a breach of a rule or of a threshold condition or, in the case of an RIE, failure to meet the recognised requirements. • To assess the implications of, and firm's* response to, a change of circumstances e.g. - proposed entry into new business area; - new control structure; - merger or take-over; - new IT system; or - launch of an E-Commerce venture. | • Concern about effectiveness of the firm's* internal audit department. • Concern about reliability of submitted financial returns. • Inability of a firm* to quantify its current financial position. • Assessment of consequences of incomplete customer files. • Concern about quality of systems and controls. • Indication of financial crime or money laundering. • Concern about a firm's* controller. • Assessment of control structure when a bank (specialising in consumer lending) diversifies into commercial lending. |
| Diagnostic/monitoring | • To verify information provided to the FCA. | • Verification of a specific return to give theFCA assurance of the quality of information provided. |
• To collect information required by but not provided to the FCA by the firm*. • To update information previously provided to the FCA but not kept up to date by the firm*. | • Failure by a firm* to provide or keep up to date information required by the FCA. | |
| Monitoring | • To review systems and controls • To complement baseline monitoring | • Assessment of systems and controls in firms* where identified as a risk mitigation priority. • In-depth review of part of a firm* which is material to the firm's risk profile but of which the FCA does not consider it has an adequate, up-to-date understanding. |
| Preventative | • To gather and analyse information on an identified risk and develop recommendations for resolution. | Review of identified control weaknesses over client money to obtain recommendations to ensure compliance with the relevant rules. |
| Remedial | • To assist in the design of a customer redress programme. • To assist in the design of a remedial action plan. • To oversee and report on remedial action plan. | • Where possible, the FCA has identified possible losses from failure to reconcile assets or from mis-posting of transactions to the general ledger. • To report on quality of work undertaken and adherence to milestones in the action plan. |
| * or, where applicable, the other persons in SUP 5.2.1 G. | ||
Non-exhaustive list of examples of when the FCA may itself appoint a skilled person rather than require a firm to do so
| Toolkit purpose | Purpose for use of tool | Examples of reasons for use of tool |
|---|---|---|
| Diagnostic/ monitoring/ preventative/ remedial | (any of the above) | • To provide a report or information that is urgently required. • To assert a greater degree of control over the appointment and oversight of the skilled person due to the sensitive nature of the matter concerned. • To assert a greater degree of control over the appointment and oversight of the skilled person in circumstances where more than one firm* is the subject of the same report or information required. |