2017年-FCA英国金融行为监管局_cp16_17_chapter6_disapplication_of_cass_audit_requirements_to_certain_debt_management_firms_2页_127kb

Regulator Assessment Summary: CP16/17, Chapter 6

Core Content

The document outlines a regulatory assessment for a proposed rule change under CP16/17, Chapter 6: Disapplication of CASS audit requirements to certain debt management firms. The Financial Conduct Authority (FCA) is the lead regulator, and the proposal was published on 10/10/2016, with the commencement date set for 4 November 2016. The origin of the proposal is domestic, and it does not include the implementation of a Cutting Red Tape review.

The primary objective of the proposal is to remove the requirement for annual CASS audits from debt management firms (DMFs) that are not entitled to hold client money. This change aims to address a potential misinterpretation of the current rules, which could be seen as imposing audit obligations on all DMFs, regardless of their eligibility to hold client funds.

Main Points

• Current Requirement: All CASS debt management firms are required to undergo an annual audit by an independent external auditor to ensure compliance with Chapter 11 of the CASS sourcebook.
• Proposed Change: The rule change would exempt DMFs that are not entitled to hold client money from the CASS audit requirement.
• Affected Businesses: Regulated DMFs that do not hold client money, primarily small advice centres and citizens advice bureaux.
• Estimated Number of Affected Firms: At least 900 firms.
• Cost Savings: The removal of the audit requirement is expected to result in an annual cost saving of approximately £846,000 for the industry.

Key Information

• The cost of a CASS audit for a small loan-based crowdfunding firm is £940 per annum, which is used as a benchmark for the estimated savings.
• The BIT score for the proposal is -£4.0, indicating a net benefit to the industry.
• The net cost to business is -£0.8, suggesting that the overall impact is positive.
• The duration of the policy is estimated to be 10 years, with the price base year and implementation date both set for 2016.

Impact on Business

• Cost Impact: The proposal is expected to reduce costs for affected firms. Specifically, the removal of the audit requirement will save each affected firm £940 per year.
• Benefit Impact: The net benefit to the business is estimated at £0.8 million per year, based on the assumption that the cost savings outweigh any potential administrative burdens.
• Unaffected Firms: Those that are entitled to hold client money will not be impacted by the rule change and will maintain their existing audit requirements.

Additional Information for BIT Score Validation

The BIT score of -£4.0 is derived from the estimated cost savings and the overall cost-benefit analysis. The net cost to business is -£0.8, which is calculated based on the cost of the audit requirement and the associated savings. The business net present value is estimated at £7.3 million, reflecting the total value of the cost savings over the 10-year duration of the policy.

This rule change is a minor regulatory adjustment that aims to align the audit requirements with the actual eligibility of firms to hold client money, thereby reducing unnecessary compliance burdens.