S166 – Proceed with Caution

Most firms will be aware of the regulator’s ‘box’ of supervisory tools, especially the one described under Section 166 (“s166”) of the Financial Services and Markets Act (“FSMA 2000”) that gives the Financial Crime Authority (“FCA”) and Prudential Regulation Authority (“PRA”) the power to commission reports by “Skilled Persons” to conduct an independent review, of a regulated firm on any aspect of a firm’s activities. A Skilled Persons Report (“SPR”) is an independent review of a regulated firm, usually focuses on specific issues where the regulator wishes to delve deeper into a firm’s activities. A s166 requirement can be triggered by regular supervision, a thematic review, or for example a tip-off.

Any firm which??has been subject to a SPR will know that this should not and must not be be taken lightly. From receiving the FCA’s draft requirements notice, to completion of the remediation actions and demonstrating sustainability, the process should be carefully and expertly managed.

The s166 investigation is carried out on behalf of the regulator but at the expense of the firm, and almost always results in a comprehensive list of findings and requirements.

Lysis Financial fully understands the challenges of a s166 engagement and draws on an experienced team of highly skilled individuals who understand the regulator’s requirements. We?recognise?that prompt and effective action is fundamental to our clients' businesses and their relationships with the regulators and prosecuting authorities. Our team can deliver accurate, swift, and incisive analysis of issues. Our substantial Operational Support Team provides a flexible and cost-effective solution for framework, policy, and procedure and, customer file and document review and remediation.

Knowing what to expect from a s166 and preparing for the journey ahead can be a deciding factor in making the process less arduous and ensuring the best outcome.

Understanding the challenges presented within each stage of a s166 engagement will enable you to stay in control. The outcome of the review will have a lasting effect. Being proactive from the outset and?taking positive steps is an investment in the firm's future.

How Can Lysis Help?

Lysis has significant experience in assisting clients with complex and contentious regulatory issues.??We can help our customers by doing a pre-s166 review, by supporting the firm through the review itself or by assisting to design, manage and execute a s166 remediation programme.

We will provide:

• Structured and experienced responses to regulatory intervention and communications;
• Expert and experienced support and guidance;
• A full and detailed analysis of your firm’s current situation;
• A gap analysis and a clear change roadmap;
• A holistic and packaged response to each remedial action;?
• Delivery of all regulatory recommendations;
• Removal from the watch list and a return to a regular footing?with the regulator; and
• Improved operational framework and strategy execution.