FCA / PRA s166 “Skilled Person” Reviews

Within the Financial Services industry group, the OCREUS Group is a member of three of the FCA and Bank of England / PRA panels for s166 “Skilled Person” reviews.

Under the Financial Services and Markets Act, the FCA and PRA have powers to appoint a suitably qualified third party (a “Skilled Person”) to report on aspects of a regulated firm’s activities if they are concerned or want further information or analysis. Two sections of FSMA empower the regulators to commission skilled person reviews:

  • s166 reports by skilled persons; and/or
  • s166A appointment of a skilled person to collect and update information.

Typically, skilled persons reviews are ordered by regulators where their own deep dive reviews or other supervisory work give rise to concerns that warrant an independent examination. Depending on the level of such concern, the extent to which management have been open, transparent and cooperative, and other factors, the skilled person may be selected either by the firm being reviewed (subject to being a member of the relevant panel(s) and approved by the regulator), or selected directly by the regulator.

The regulator will issue a draft “Requirements Notice” to the firm that formally orders the skilled person review and sets out the review scope and other parameters. Once the reviewer has been appointed the draft notice will be finalised and the review can start.

The skilled person review reporting process is robust and transparent. The draft report is normally delivered to the regulator at the same time as the firm, and all management comments and any changes to the draft are fully tracked and reported to the regulator. Following issue of the final report a closeout meeting allows discussion between the reviewer, regulator and firm. Often the reviewer will require firm management to make formal representations as part of the reporting process.

The firm will then be given a timeline to implement any necessary changes or remediation identified by the reviewer by the regulator.

The OCREUS Group is able to conduct formal skilled persons reviews within three of the FCA / PRA subject matter lots:

Lot A – Client Assets

Lot B – Governance and Individual Accountability

Lot E – Financial Crime

For more details on the skilled person review framework, click here for FCA and here for Bank of England / PRA.

Some firms may wish to commission shadow or preparatory reviews to ensure management can get visibility of the issues that might arise should a formal review be ordered, or in parallel with a formal review, to obtain additional data or an alternative view.

Please contact us at s166@ocreus.com for FCA / BoE / PRA skilled person review enquiries.