How well do you assess the adequacy of your firm’s financial resources?
What’s happening?
This month, the FCA is publishing its final guidance (FG 20/1) on a framework to help financial services firms ensure they have adequate financial resources and to take effective steps to minimise harm. In this document, the FCA is setting out its expectations of how firms will determine that they have adequate financial resources, and is aiming to provide more clarity on the role of adequate financial resources in minimising harm, on the practices firms can adopt when assessing adequate financial resources, and on how the FCA assesses the adequacy of a firm’s financial resources
This guidance applies to all FCA solo-regulated firms subject to threshold conditions and/or the Principles for Businesses.
What do you need to do?
The FCA’s intention is to improve the way firms operate so they can take effective steps to prevent harm from occurring, by improving controls and/or reducing the risk in their activities and putting things right when they go wrong.
The FCA emphasises in the guidance document that it expects from all firms;
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- a proportionate and regular assessment of risks
- an understanding of their business model and strategy and of any potential vulnerabilities
- that they will understand what harm is and prevent it from occurring
- that they will put things right when they go wrong
- that they will minimise harm in the event of failure (via wind-down planning)
How can we help you?
If you’d like to know more about financial resources requirements, risk analysis, wind-down planning, or any other aspect of FCA compliance, our expert team is here to help. Contact us today on 0207 436 0630 – or email info@thistleinitiatives.co.uk.