HomeServe: further insight into regulatory expectations of senior management - .PDF file.
The recently published Financial Conduct Authority (FCA) sanction against HomeServe Membership, an insurance intermediary, provides further insight into the regulator’s expectations of senior management. It also highlights the corresponding importance of a strong regulatory compliance culture within financial institutions.
In February 2014, HomeServe received the largest-ever retail conduct fine — £30m — for a series of ‘serious, systemic and long-running failings’. This article focuses on those aspects of the FCA’s findings relating to senior management engagement and compliance culture — two key areas of current regulatory focus. While it may be tempting to dismiss the FCA’s conclusions in HomeServe as ‘retail specific’, prudent ‘wholesale’ firms will also take heed — for there are lessons to be learnt across the regulatory spectrum.
In broad terms, HomeServe ‘failed to embed a robust culture with adequate focus on compliance and treating customers fairly’. Additionally, senior management were found to have been ‘insufficiently engaged with compliance matters’…
Click on the link below to read the rest of the Macfarlanes briefing.