166 Audits Useful Links

Financial Services has a plethora of documents this is often overwhelming we have provided an intentionally short(ish) list of document here that relate specifically to the UK EMI sector, audits and 166 audits issued by the FCA. We hope that you find this a useful training resource and a useful source of consolidated information an links.
 
Section 166 audits: sometimes referred to as the FCA's 'nuclear" option. If you are an EMI and a you have Real Time Gross Settlement (RTGS) the FCA will allocate you a 166 under supervision as a standard measure. If however the FCA has concerns about your firm and your firm has attracted the attention of the FCA supervision team you will receive a 166 under supervision. If you are receiving a 166 under the FCA enforcement team this is very serious for your firm. 166 audits are reassuringly expensive, but not as expensive as the brand damage and the cost or the remediation plan and or fines that follow.

According to the key areas of FCA 2022-23 annual report, the FCA commissioned a total of 47 Skilled Person Reports into firms, of which 10 pertain to failures in financial crime compliance, resulting in a total cost incurred by regulated firms of £35.1m
 
Please do talk to us as early as possible about using RAaaS to prevent the FCA from issuing your firm with a 166 in the first instance, or as part of your preparations for procuring and conducting your 166 audit.
 
FCA 166 audit powers
FCA skilled persons panel that can conduct various lots under the 166 audit regulations
Overview of the 166 audits and why the FCA uses them by plenitude (lot 3 166 audit firm). 
   
The culture of compliance in your firm is critical - the 'tone from the top' and the culture at every level of the firm is key - if you have a problem here and it is not fixed very quickly, you can expect a difficult and expensive 166 audit process and further action by the FCA potentially under enforcement. The RAaaS audit has been designed to quickly and cost-effectively identify cultural and organisational behavioral issues in firms quickly and in a non-confrontational manner so you can remediate them before it is too late.    

FCA 12 Principles - note that the RAaaS marks your firm against these so you can improve quickly and mitigate fines and other risks quickly.
EMR regs 2011
FCA Financial Crime Guide
Joint Money Laundering Steering Group Organisation

You should note especially the 'good and poor firms' behaviours in the Financial Crim Guide - RAaaS has done the hard work for you - you just run the digital audit and you have the results in 72 hours.

Dear CEO letters. If your firm has not actioned these points that the FCA has flagged to the industry the 166 audit will for sure pick this us.

Dear CEO Mar 23 letter and FCA expected priorities for EMI.
Dear CEO letter Apr 24 and adequate financial resources
Dear CEO May 24 letter and Consumer Duty 

Thematic reviews - as per the Dear CEO letters - the FCA is actively looking at these areas - your firm should be paying attention to these and acting with integrity.


The FCA want you to run your business in accordance with the 12 Principles and the rules and regulations - they don't actually want to fine you (indeed this is almost a last resort for the FCA) - but when they do expect the numbers to be material as per FCA press releases for fines

Note how the fines relate back to the FCA 12 Principles (which your RAaaS will score your firm against) in the case of Santander and £ 107.7m fine. here

If we have not included anything that you think would be helpful to you and others - please do contact us and we will add it