Fintech and innovative businesses
The challenges faced by Fintech firms are often interesting and a little out of the ordinary. We understand exactly why that is. Technology that disrupts can offer great advantages as a new business model but risks conflict with existing regulatory approaches. Ensuring that you have a full understanding of the rules and regulations that will apply to your business is the basis of our approach. Facilitating your FCA or PRA application and then adapting your business process to ensure you can reach your full potential while remaining compliant is our aim.
In helping you achieve this, we can map out your regulatory responsibilities and help you navigate and mitigate regulatory risks. This will include creating the right governance framework supported with proportionate policies and procedures which not only clarify, but fully meet regulatory demands.
Our history is intertwined with investment firms, either as practitioners or previous regulators of the sector. We are happy to service wealth management firms, asset managers, fund managers, investment managers, private banks, and pension administrators/advisors.
The rules that apply to investment activity are complex and ever increasing, for example, areas such as MIFID II, recent changes to the CASS regime, Market Abuse Regulations, AIFMD and the Senior Management & Certification Regime (SMCR) all present challenges to investment firms and sit at the very centre of the FCA’s agenda. We can help interpret the rules and adapt your business processes to minimise regulatory risks and balance up operational efficiency. Our assistance with reviewing capital structures, liquidity and compliance with prudential rules, for example, will benchmark you against your peers to keep your business ahead of the game.
The UK market for both general insurance firms and life assurers has proven increasingly challenging in recent years. A constant onslaught of new regulations, whether derived from Europe or more specific ones from within the UK, all combine to increase the cost of capital for insurers and to complicate the distribution to the public.
Whether you are grappling with the most efficient application of a new Solvency II model or if you simply wish to review the efficiency of your capital allocation and key business areas, we can help. The application of a micro-prudential approach to your business will help bring out any areas of potential non-compliance and identify improvements.
The need to maintain robust GRC frameworks has never been more relevant to this sector. We can help by providing challenge and solutions to address gaps in your current governance framework. We can assist you with all ICOBs related regulations impacting the insurance sector. We believe both areas will receive greater regulatory scrutiny over the coming years from the FCA so now is the time to take stock and seek professional assistance.
Mortgage/home finance provision & distribution
Mortgage brokers and intermediaries have become used to regulatory change in their practice area over the last decade or so. This shows no likelihood of slowing down. With the Mortgage Market Review of 2014 still being embedded, changes in buy-to-let criteria impacting business practices and increased longevity starting to evolve the nature of lifetime mortgages and home reversions, your business will be benefit from an extra perspective in deciding the best way forward. We are also happy to undertake hot or cold file reviews, review of propose controlled persons changes, or assess the impact of the Mortgage Credit Directive on your business practices.
With one of our partners having worked at Board level within both a bank and a building society we understand the challengers being faced within such businesses. The increasing impact of Money Laundering requirements, the seriousness attached to the Senior Management & Certification Regime to the board composition and the increasing complexity of the application of prudential rules are just some of the challenges being faced. Retail banking is a complex area of overlapping regulatory requirements.
At Momentum GRC we consider it vitally important that you have a clearly documented strategy, that not only defines your commercial aspirations and how you will achieve them, but also recognises and mitigates key areas of risks your business faces.
Our help will guide your path through any such challenges and regulatory hotspots, to find the best route for your individual business.
Insurance intermediation is an area that is impacted not only by regulation but also by the demands of the insurers for whom the distribution is undertaken. Our consultants have many years’ experience of the practicalities of compliant distribution and the idiosyncrasies of the paperwork required by FCA regulation. In depth assessments of your firm’s MIPRU, ICOB and CASS compliance form the central part of our review work. We will also consider your TCF (Treating Customers Fairly) approach to ensure that you are at operating at industry best practice levels, as well as your SYSC approach to ensure the senior management arrangements are compliant.
Intertwined amongst this complexity is the need to ensure you have a clearly defined conduct risk model, which not only meets regulatory expectations but also draws out the key metrics and measures to facilitate a robust conduct risk operating model within your firm. The FCA has set high standards for conduct risk, it is therefore important you set and maintain your own standards to meet these demanding expectations.
Following the transfer of responsibilities from the OFT to the FCA, in April 2014, the number of firms authorised by the FCA has increased substantially. The new consumer credit regime introduced new regulations to this sector which, depending upon your operating environment, will impact you in some form or another. Areas include AML & financial crime, client assets, financial promotions, consumer credit reporting and the fair treatment of customers.
It is critically important that you not only understand your regulatory obligations, but that you are also aware of what measures / steps you need to take, or should have taken to meet such requirements. Whether you are a new firm seeking assistance to become authorised, or already established, we can provide impartial and independent advice in relation to your needs.
We are experienced and resourced to assist you regardless of the role your firm plays in the consumer credit chain, including debt management, rent to own, or more general credit broking services.
One of our partners has direct experience of working for some of the largest global custodian banks as well as supervising them as a regulator. We therefore understand the ongoing challenges, from both a systemic and regulatory perspective, faced by all firms administering custody assets on behalf of their clients.
Whether you are a custody provider seeking advice or support on your current arrangements, or you are about to appoint a custody provider and need to perform due diligence, we can provide guidance on all regulatory matters relating to custodian regulations. We can help by enhancing your understanding of the regulatory risks associated with custodian frameworks and provide pragmatic solutions on how to mitigate such risks.
Trustee and Depositary services – authorised funds
The regulatory and fiduciary requirements placed on trustees / depositaries are far reaching, as are the expectations placed on managers of authorised funds. One of our partners has direct experience of working within a trustee and depositary firm.
Aside from maintaining responsibility for the safeguarding of assets of the authorised fund, the role of the trustee and depositary is also to oversee and monitor the key functions performed by the authorised manager, including; unit pricing, dealing arrangements, portfolio valuation and ongoing adherence to each fund’s stipulated investment and borrowing power restrictions. At Momentum GRC we are also witnessing an increased focus by trustee and depositary firms on the governance frameworks, BCP arrangements and three lines of defence effectiveness in managers of authorised funds.
If, as an authorised fund manager you are experiencing challenges in this area, we can provide the right level of support and expertise to help you address your needs.
Third Party Administrators – oversight arrangements
Whilst third party administrators are not directly authorised and regulated for the vast majority of activities they perform; they nevertheless play a key role within financial services. The concentration of TPA providers and associated risks cannot be overlooked. We have seen recent examples where the FCA has taken steps to penalise firms for not having adequate oversight of TPAs. In our experience a lack of understanding and sufficient documenting of TPA regulatory risks are common issues which result in not meeting FCA outsourcing expectations.
We have direct experience of both working at a TPA as well as assisting firms to enhance their governance and oversight arrangements of their TPAs. We can assist you by creating a regulatory footprint and then designing a compliance risk assessment to identify, assess and risk score TPA activities. This will then be used to generate a compliance monitoring programme; an effective tool to monitor and oversee your TPA. We can advise you on all aspects including balancing on site monitoring vs. desk based monitoring thus ensuring your arrangements are robust, practical and meet expectations.