The Concept
If one thing is constant in today’s world, it’s that it doesn’t stop changing. This is just as much the case in financial services as in any other area. As new demands come into the market place, new products evolve to meet those new demands.
New products. New regulation.
The FCA’s policy for meeting these challenges is well known. Faced with the impossible task of keeping a rule book up to date to cope with unknown and unforeseeable events, FCA has an “outcomes focused” approach. Rather than make detailed rules to fit every event, FCA requires firms to achieve its desired outcome.
Fewer rules. More outcomes.
Firms are free to set their own policies and procedures to suit their own business models. They should be safe in the knowledge that as long as they adhere to the FCA’s principles, they will be compliant.
Greater understanding. Greater certainty.
The risk for management is two fold – do nothing, and risk the business nightmare of regulatory breach and reputational damage. Do too much, and risk overloading the business with controls and procedures that are inappropriate and disproportionate.
The pace of that change does not abate. Government – and the public – expect financial markets to be orderly, predictable and above all clean. Policy initiatives continue to evolve to meet the public’s legitimate expectation that their savings are safe in your hands.
Greater expectations. Greater requirements.
FCA signals its expectations of “good outcomes” not just through a rule-making process, but through a variety of speeches, discipline, letters and informal guidance. The effect of this is to pass responsibility to the regulated firm – and in particular, its directors – to allow them the freedom to chart their own path to compliance.
More freedom. More risk.
This is not an easy task. As policy evolves and priorities change, so FCA will send out further signals of its changing expectations. Keeping up with regulatory thinking can become a full time job.
Fewer rules. More complexity.
In this dynamic situation, everybody needs help in finding the right balance of process and control for their firm. Fulcrum Compliance can assist you in finding this.
More balance. Less risk.
