Arrow II – better second time around?

From March this year firms subject to an ARROW review will find a very different approach has been adopted by the Financial Services Authority. In this article Patrick Devine, of law firm Reynolds Porter Chamberlain, explains why the process has been updated and how the regulator’s assessment of firms’ risk management will become more of a two- way process in future.

Building on the success of its “Advanced Risk Responsive Operating frameWork” (ARROW) initiative, launched in January 2001 to assess individual firms’ risk-based approach to business, the FSA’s re-branded ARROW II process will be put into effect for assessments commencing from March 2006, placing an increased responsibility on individual firms to identify inherent business risks and implement risk mitigation controls where necessary.