Tackling serious failings in firms

The FCA has published a statement on how we will address serious failings of standards in firms.

The FCA has today published a statement on how we will address serious failings of standards in firms. The statement outlines a new approach called ‘Enhanced Supervision’. The statement applies to all firms and should be read in conjunction with the FCA’s supervisory approach documents. 

Enhanced Supervision is a formalisation of how we supervise in practice.  Our supervisory approach is focussed on the root causes of failings in firms. Where a serious failure of standards poses a risk to our objectives, and our normal approach may not enable us to tackle these issues in a timely way, the firm will be made formally subject to Enhanced Supervision.  We expect this to occur only in exceptional cases.  Key features of the approach will be:

  • a review of the supervisory strategy
  • where necessary, we will require formal commitments from the firm’s Board to address underlying issues
  • consideration of the use of other tools and powers, including the imposition of requirements under s55L of FSMA (OIREQ)

The statement also explains how the recommendations of the Parliamentary Commission on Banking Standards in respect of ‘Special Measures’ are achieved through the FCA’s supervisory approach.