The FCA has published two guides on its approach to supervision for fixed and flexible portfolio firms.
The guides follow Tracy McDermott’s (Acting Chief Executive, FCA) recent announcement that the FCA will move away from the C1 – C4 conduct categories to a two category system of ‘fixed portfolio’ or ‘flexible portfolio’.
The FCA notes that fixed portfolio firms are among the largest it supervises – those with very large numbers of retail customers or wholesale firms with a significant market presence. Thus, those firms are subject to an intensive level of conduct supervision, with an ongoing proactive relationship and a dedicated team of FCA supervisors.
Alternatively, flexible portfolio firms are supervised through a sector-based approach, with firm-specific engagement determined by the FCA’s risk assessment and prioritisation model. These firms will use the FCA’s customer Contact Centre as their first point of contact with the regulator as they are not allocated a named individual supervisor.
There are also four prudential supervision categories. These are independent of the conduct categories: a firm or group can fit into any of the prudential categories regardless of what conduct category they are in. These categories are explained in the prudential supervision section which appears at the end of both guides.
View The FCA’s Approach to Supervision for fixed portfolio firms, 18 September 2015
View The FCA’s Approach to Supervision for flexible portfolio firms, 18 September 2015