What happens next on TCF? Howard Lent reports
Next month, the FSA will assess the industry's progress on Treating Customers Fairly (TCF) implementation, and publish summary results.
For larger firms engaged in retail markets, the FSA will form a view on each firm. This view will take account of all relevant information available to the FSA at that time, including that obtained in the course of usual supervisory contact (for example 'arrow' or thematic visits) and, in some cases, including the results of bespoke visits to look at particular TCF related issues.
For smaller retail market firms, the FSA is conducting a major qualitative survey of a sample of 700 firms.
The FSA will also explain its approach to firms that fail to meet the target.
Factors that the FSA will take into account will include:
• How well known the firm is, and to understand the issues at the firm at that stage – more exploratory work may be necessary
• The reasons for delay in each case, and show how concerned the FSA is about the scope for consumer detriment.
The FSA set out its approach to enforcement action in July 2005 and reiterated it again in July 2006.
On firms, the FSA said: "We are less likely to take enforcement action where the firm has considered the implications of TCF for its business, where senior management have played the role we expect of them in relation to TCF; where a firm has made a genuine attempt to deliver on what TCF means for it; and where there has not been significant actual – or risk of – consumer detriment.
"Conversely, we are more likely to take enforcement action in cases where a firm has not responded to indications that there are problems, has failed to identify shortcomings and to develop a strategy or action plan to deal with them."
On senior management it said: "We expect senior management to take responsibility for ensuring that their firms treat their customers fairly, including identifying risks, having appropriate systems and controls in place to mitigate these risks, and ensuring these are effective. Where we detect a breach which requires enforcement action we will consider taking action against individuals within the firm, if we consider that senior management have failed in their responsibilities."
