Case Study: Managing the client's response to regulatory intervention under s166 of the Financial Services and Markets Act 2000
The Client
A major FTSE-100 financial institution.
The Challenge
The client was required by the Financial Services Authority (FSA) to commission a 'skilled persons report' under section 166 of the Financial Services and Markets Act 2000.
The report itself identified 60 findings with over 160 individual sub-findings across the governance, risk and compliance departments that required remedial action.
The Solution
Lysis worked with the firms' Board and senior management to shape, design and plan solutions for each of the s166 report findings. Lysis produced a detailed programme plan and programme reporting structure and put in place tracking tools for the programme deliverables to ensure accurate and timely delivery.
Lysis then worked with executive and senior management to initiate the programme, build the team required and respond to initial FSA challenges on programme set-up.
Lysis managed the entire programme, spanning the Governance, Risk, Compliance, Operations and IT functions, reporting to a Board-level Steering Committee.
Each of the report's findings formed an individual work-stream (60 projects in total) and evidence of successful completion of those workstreams was sent to the FSA on a monthly basis.
The s166 solution involved significant changes to the following:
- Changes to global governance structures, boards, committees and legal entity governance
- Senior management remuneration
- The role and activities of the Audit Committee
- Group Policies, Delegated Authorities and escalation arrangements
- Board-level Management Information
- The role and effectiveness of NEDs
- Governance, structure and operation of the compliance function
- Global and regional compliance policies
- Arrangements for Transaction Reporting and Market Abuse detection
- Governance, structure and operation of the risk management function
- Risk management policies including ICAAP
- Design and implementation of strategic planning arrangements
The Outcome
All milestones across the 12-month programme were achieved on time and under budget.
All deliverables (several hundred in total) were accepted by the FSA.
All changes arising from the programme were implemented and embedded as business as usual within the firm.
Confirmation from both internal audit and the appointed skilled person in their post-implementation reports that the firm had satisfied the requirements of the s166 report.
Effective roll-out and handover to line management.
Regulatory restrictions on the firm were lifted