Common Platforms
Common Platforms
Common Platforms
With effect from 1 April 2009, the FSA extended the 'common platform' requirements to firms who are not currently subject to them i.e. 'non MiFID' firms.
This affects a variety of firms, including:
- Insurance Intermediaries,
- Mortgage Brokers and
- Authorised Professional Firms.
Currently, these firms are subject to the systems and controls requirements in SYSC Chapters 2 & 3 but these no longer apply and have been replaced by the following Chapters:
- Chapter 4: General organisational requirements (including business continuity
- Chapter 5: Employees, agents and other relevant persons
- Chapter 6: Compliance, internal audit and financial crime
- Chapter 7: Risk control
- Chapter 8: Outsourcing
- Chapter 9: Record keeping
- Chapter 10: Conflict of interest
The move over to the 'common platform' is not a significant issue for firms because many of the provisions in SYSC Chapters 2 & 3 are substantially the same as those in the 'common platform' However there are two new provisions that firms will need to be aware of outlined below:
- SYSC 8 - Outsourcing
Emphasises the continuing responsibility of firms and its management i.e. firms cannot outsource ultimate regulatory responsibility.
SYSC 8 sets out a number of requirements in relation to outsourcing arrangements including:
- Where tasks are outsourced the respective responsibilities and obligations of the parties should be clearly outlined in a written agreement.
- Where activities are outsourced the firm should establish methods for assessing the standard of performance.
- The firm should also demonstrate that it has the appropriate expertise to supervise and assess risks.
Firms should also ensure there are procedures in place in respect of access to data / premises etc. and that appropriate contingency planning /disaster recovery procedures are
in place at the service provider being used for outsourcing.
The FSA has exempted 'non-MiFID' firms' existing outsourcing arrangements. Therefore firms only need to take into account the outsourcing requirements when entering into new outsourcing arrangements from 1 April 2009.
Source: Financial Services Authority
Submitted by {Douglas Martin Associates} on Monday 11th May 2009