This includes ensuring that the transferring firm has adequate run-off cover and/or capital put aside in escrow, that sale proceeds and/or assets have been ring-fenced and by assessing the risk of the advice given through robust files reviews and ongoing review of past advice.
Brian Nimmo, Head of Redress at Broadstone, commented: “The latest update from the FCA on polluter pays regulations is another shot across the bows to ensure firms are making the requisite preparations when it comes to setting aside capital for potential and actual redress liabilities. There is a clear requirement for firms to have adequate financial resources to be able to provide redress which means assessing the risk in their book to calculate a redress value on that risk. This is likely to be a very challenging exercise so many firms begin planning now and considering the partners and expert advice they may need to comply with the regulations.
“We are still awaiting a response from the FCA on CP23/24 to establish clear guidance around what the FCA believes is an appropriate level of asset retention, but firms should certainly begin preparing immediately – they cannot say they haven’t been warned.”
FCA: Redress liabilities: an update for firms
FCA: Redress liabilities: the polluter pays
|
