2017年-FCA英国金融行为监管局_changes_to_supervision_model_4页_257kb

Regulator Assessment Summary: Changes to Supervision Model

Core Content

The FCA conducted an assessment of the proposed changes to the supervision model in October 2016, with the commencement date set for September 2015. The review aimed to address the perception that the supervision model was overly prescriptive, leading to cost savings for regulated firms without imposing additional costs. The changes primarily focus on increasing flexibility in supervision approaches for both fixed and flexible portfolio firms, and adjusting the group supervision model to better align with sector-specific risk profiles.

Main Areas of Change

1. Fixed Portfolio Firms

• Objective: Increase flexibility in supervision to better match sector risk appetites and reduce unnecessary administrative burden.
• Key Changes:
  • BMSA Material: More flexibility in the format, content, and frequency of Business Model & Strategy Analysis (BMSA) material.
  • Deep Dives: No minimum number of deep dives required, reducing the number by 135 firms.
  • MI Review: Minimum requirements for Management Information (MI) review have been removed, though some MI requests may still occur.

2. Flexible Portfolio Firms

• Objective: Shift from inspection-based supervision to market-focused activities such as communication, engagement, and education.
• Key Changes:
  • The C3/4 distinction has been removed.
  • Inspections: No inspections will be carried out for C3 and C4 firms.
  • Outreach Work: Replaced with education and engagement initiatives, which are cost-free for firms.

3. Group Supervision Model

• Objective: Refocus supervision on sector-specific risks rather than applying a one-size-fits-all approach.
• Key Changes:
  • Sectors are now responsible for addressing issues relevant to their sector.
  • Supervisors can allocate more attention to the most significant risks.
  • No cost savings are expected from this change, as the volume of supervisory work remains the same.

Key Information and Impact

• Affected Businesses: All regulated firms (approximately 55,000) across all sectors.
• Cost Savings Estimate:
  • Fixed Portfolio Firms: £53,000 to £124,000 per year.
  • Deep Dives: £628,000 to £2.22m per year.
  • Flexible Portfolio Firms: £1.008m to £2.37m per year.
  • Overall Savings: £1.689m to £4.71m per year (average of £3.19m).
• BIT Score: -17.0

Additional Information for BIT Validation

• Business Model and Strategy Analysis (BMSA): Used to assess a firm's sustainability and identify conduct risks.
• Categorisation:
  • C1 & C2: Fixed portfolio firms with named supervisors and high levels of firm-specific supervision.
  • C3 & C4: Flexible portfolio firms with less frequent firm-specific engagement.
• Deep Dives: Focused investigations conducted by supervisors on fixed portfolio firms.
• Pillar 1: Proactive firm-specific work involving structured assessments and engagement.
• Pillar 2: Event-driven and reactive supervision, addressing emerging or existing problems.
• Pillar 3: Thematic supervision targeting key conduct risks across sectors.
• Proactive Engagement (PE): Process for supervisors to maintain an updated understanding of a firm's operations and risks.
• Sector Teams: Embedded within the Supervision area, responsible for risk identification and sector representation.

Summary of Benefits and Costs

The overall cost savings from the changes are estimated to range from £1.689m to £4.71m per year, with an average of £3.19m. These savings are attributed to the reduction in prescribed meetings, deep dives, and inspections, while the group supervision model remains unchanged in terms of workload.