On August 26, 2014, the FCA published a letter dated August 22, 2014 to the FCA Practitioner Panel setting out the FCA’s approach to using attestations as a formal supervisory tool. The FCA Practitioner Panel had expressed its concern to the FCA that without further clarity about the FCA’s approach to attestations, the increasing use by the FCA of the tool might skew prioritization of risk at firms. The FCA letter states that the most usual scenarios in which attestations may be used are:
- notification to the FCA where, in cases of emerging risk which are not likely to result in consumer harm or negatively impact market integrity, the nature, extent or magnitude of the risk changes, including assurance from the firm that it will monitor the risk;
- undertaking that a firm will take specific action within a specific timescale;
- self-certification that the risk has been resolved; or
- verification that a risk has been resolved or mitigated, including, for example, by internal audit.
The FCA intends to issue revised internal guidance and supporting materials, emphasizing the importance of clarity and transparency when using attestations to its supervisory personnel.
The FCA letter is available here: