Making a success of firm-commissioned reports

If a firm discovers an issue in its business or FSA alerts it to supervisory concerns, a common response is for the firm to commission its own report into the matter, usually by instructing its lawyers or accountants. Increasingly, firms are looking to share these reports with FSA, says Alison McHaffie of CMS Cameron McKenna, in the hope that they will convince the regulator that it does not need to carry out its own investigation or require the firm to appoint a skilled person to produce another report. This is an area in which the FSA has recognised that good cooperation between it and the industry can produce “tangible benefits” and last year FSA introduced provisions into the Enforcement Guide setting out its expectations and the approach it takes with firms that are looking to use their reports in this way.

Alison McHaffie (+44 (0)20 7367 2785, alison.mchaffie@cms-cmck.com) is senior counsel in the Financial Services team at CMS Cameron McKenna LLP

As readers will be aware, FSA is becoming much more engaged in issues arising in a firm’s business. Not only has it introduced its new intensive supervision model but it is also carrying out more investigations and the number of skilled persons reports it requires is increasing year on year – there were 56 in 2008/9 compared with 29 in 2007/8. As this article will explain, there are important benefits to be gained by a firm seizing the initiative, commissioning its own report and convincing FSA to let it carry out its own investigation rather than sitting back and losing control.