Request a Demo Today

Dear CEO | Release Date: 23rd July 2019

To read a shorter summary of this Dear CEO letter, click here.

To access the original FCA document, click here.

Long Summary

The Financial Conduct Authority (FCA) has outlined its supervision strategy for Wealth Management and Stockbroking firms for the 2019/20 period. This strategy seeks to mitigate potential risks and ensure the protection of consumer interests and market integrity.

Overview of Industry Risks

The FCA has identified four principal risks that these firms may pose to their customers and the broader markets:

Strategic Focus Areas

The FCA’s supervision for the period will concentrate on key areas including:

Actions for Firms

Remuneration and Incentive Structures

The FCA underscores the importance of remuneration structures that promote a healthy corporate culture and align with consumer interests. The Remuneration Policy Statement (RPS) should reflect a firm’s commitment to these principles, and firms are required to submit detailed RPS documentation annually.

Compliance with SM&CR

The Senior Managers and Certification Regime (SM&CR) extends to all FCA solo-regulated firms from December 2019. Firms must ensure compliance with the new standards of conduct and responsibility set out in the regime, reflecting the FCA’s commitment to raising industry standards.

EU Withdrawal Considerations

Post-Brexit, firms must consider the implications of EU withdrawal on their operations, especially those with clients in the EEA. Firms are encouraged to maintain transparent communications and manage their contractual obligations prudently under local and international regulatory expectations.

Conclusion and Next Steps

The FCA expects firms to engage with the outlined strategic priorities actively and adjust their operational and compliance frameworks accordingly. Regular updates and further guidelines will be provided to ensure firms are on track with the implementation of the necessary measures.

Key Takeaways and Actions

This comprehensive summary aims to assist CEOs and board members of Wealth Management and Stockbroking firms in navigating the regulatory landscape, ensuring that their firms not only comply with current regulations but are also well-prepared for future challenges.

Back to the Dear CEO letter archives.