FSA slams controls in financial sector
The Financial Services Authority (FSA) has this week sent out a "Dear CEO letter" to 1,000 chief executives within the insurance, asset management and investment banking community demanding that "chaotic controls" regarding the handling of client assets are addressed immediately. Accompanying the letter was a report put together by the FSA over the last six months which detailed a number of major concerns regarding the protection afforded to client funds and client assets within the financial industry.
While it would be wrong to suggest that all financial institutions have operational issues regarding compliance with FSA regulations, we have seen an increase in the number of penalties and censorships over the last few months. There is a growing concern within the FSA that client funds and client assets are not as well protected as they should be with some firms apparently operating fairly "lax" internal operating systems.
Even though a number of companies have been specifically highlighted as "giving concern" to the FSA, the industry as a whole has been warned that future regulatory visits will focus upon the points highlighted in the letter and unless improvement is seen immediately there will be further action. This is not exactly the kind of news which gives UK investors confidence in the system or the regulator!
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