FCA focus: outsourcing and CASS
This article highlights the continuing regulatory focus on the implementation of strong and efficient systems and controls in respect of both CASS and the outsourcing of regulatory functions.
The required oversight of outsourced arrangements is a key issue for the FCA and extends beyond client money compliance. All regulated firms need to consider their outsourced functions – for example the outsourcing of due diligence, IT and data management services (see FCA Guidance FG16/5 published in July 2016) or customer contact centres.
The FCA has issued three Final Notices since July 2016 in respect of CASS failings: two against firms (Aviva, Towergate) and one against an individual (Timothy Philip) including the first enforcement case on the oversight required of outsourcing arrangements. These notices deliver a strong message and highlight the importance of prevention, detection and remediation of regulatory breaches.
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