The FCA has published its latest Regulation Round-up.
In the introduction to the Round-up, Tracy McDermott, Acting Chief Executive, outlines changes that the FCA is making to its supervisory model, including how it classifies firms. These changes follow the FCA’s December 2014 document, Our Strategy.
Ms. McDermott states that the FCA will continue to look at the way individual firms and people behave, but will also increasingly look at how markets work as a whole, with greater emphasis on sector and market-wide analysis. Part of the change to the FCA’s supervisory model is a move away from the C1-C4 conduct categories to a two category system of either ‘fixed portfolio’ or ‘flexible portfolio’.
Fixed portfolio firms will continue to be subject to a programme of firm or group-specific supervision (Pillar I), while flexible portfolio firms will be subject to event-driven reactive supervision (Pillar II) and thematic issue or product supervision (Pillar III) only. Due to the reclassification around 70 firms will move from ‘fixed’ to ‘flexible’ portfolio or from ‘flexible’ to ‘fixed’. Any firms that will change classification will be contacted directly by the FCA.
View Regulation Round-up September 2015, 17 September 2015