20.07.2020

Regulatory Visits & Meetings in the Times of Covid-19

Regulatory Visits and Meetings in the Times of Covid-19

The UK regulators have devoted significant resources to their responses to coronavirus. They are issuing information and updating guidance on an on-going basis. Financial firms should monitor the FCA site and (where dual regulated) the PRA site to ensure they are aware of the latest regulatory thinking.

The regulators are busier than ever and are in contact with firms on Covid related matters. In addition other regulatory meetings and visits are continuing, although these may have an additional Covid flavour. For firms, preparing for and managing these meetings is even more challenging than usual as some staff and / or some of the regulators may be operating remotely.

Regulatory visits to a firm, sometimes at short notice, can involve any of a firm’s staff from the top to the coal face. These meetings can have a number of consequences: regulator driven work programmes; capital and liquidity add-ons; Section 166s; and various types of intensified supervision. At worst, as highlighted by the FCA in its “Dear CEO” letter at the start of this year to alternative investment firms, visits can lead to enforcement and penalties for firms and individuals, particularly those individuals with specific accountabilities under the Senior Manager Regime. This comes in the wake of the FCA pronouncements that there are real and meaningful consequences for firms and individuals who don’t match up to regulatory requirements and expectations.

Regardless of whether regulatory meetings are being held remotely or not, they are a significant source of operational risk to your firm. The majority of your controls may be in very good shape, but what if some of your staff mis-speak, underperform, give slightly conflicting answers, forget compensating controls, or are not be able to evidence their statements, leading to regulatory concerns that are hard to allay? Often overlooked is the need for training in regulatory meeting techniques. Would you put staff in front of the press without proper training? Probably not, therefore training is also essential for staff if and when they are interviewed by the regulator.

So how to reduce the risk to your firm associated with regulatory meetings and visits? Can you deliver the required training? Face to face is one option, but is costly and resource heavy. Another option is interactive eLearning. It is low cost, effective, and accessible at any time anywhere. The ability to prepare staff for visits safely and remotely is even more important in our current times.

As a starter for 10, here are our top tips to help you manage your next regulatory visit.

Tip #1: Managing remote meetings:

In normal times remote meetings should be avoided where possible as it much harder to judge regulatory body language and interact effectively. In our current times points to consider include:

  • Modern meeting software allows for recording, this can be used for personal or group practice, you can see how responses to difficult questions come over
  • Don’t record actual regulatory meetings without obtaining the permission of the regulators first, and consider that recording regulatory meetings can look very defensive
  • Remember it is easy to talk over others in virtual meetings. Leave pauses for others to speak, particularly the regulators
  • Staff contributing remotely should look at the PC camera (to give eye contact) at least some of the time. It is very easy just to watch the interviewers’ faces on screen!

Tip #2: Prepare thoroughly – individually, and as a team

  • Read the material sent to the regulators
    • Think about likely questions
    • The documents provided are likely to be a month or more out of date, do you know the latest statistics?
  • Prepare answers for all possible question types
    • Open questions – greatest risks? main weaknesses?
  • Think about the regulatory questions behind the visit
  • Prepare examples to bring controls to life
    • Make sure others being interviewed can quote the example effectively if the regulator double checks

Tip #3 – Hone your meeting style

  • Listen carefully to the question
  • Work as a team
    • Show the strength of the team not just the most senior individual in the meeting
  • Resist the temptation to say what the regulator wants to hear or answer a question not asked
  • Be open, clear and factual
    • When asked about risks, areas of weakness and concerns, give honest clear answers …. and always highlight key mitigants and compensating controls
  • Use the memorable examples you have prepared

Tip #4: Manage potential issues coming out of meetings:

  • Use interviewees’ or observers’ feedback from each meeting to assess potential emerging regulatory issues
  • If an interviewee has accidentally misled a regulator, or a regulator has mis-interpreted what was said, ensure this is corrected as a priority
  • If the regulator has identified an unaddressed area of significant weakness, consider possible actions the firm could take ahead of more formal discussions / letter on the matter from the regulator

Our Successful Regulatory Meetings Interactive Training, in partnership with Metidian, allows users to participate in a series of virtual interactions with a regulator – simulating both the preparatory, and interview elements of a real visit. This training was developed as part of our continued commitment to supporting firms when it comes to embedding the right behaviours.

  • Make virtual decisions and experience outcomes in a risk-free environment.
  • Learn to understand the regulator’s perspective.
  • Acquire skills to respond confidently to questioning.
  • Reduce risk in your business and build better regulatory relationships.

If you do not subscribe to any of our content catalogues or wish to find out more about our Successful Regulatory Meetings training, please contact your Account Manager. Alternatively, you can get in contact with us here, email digitallearning@theaccessgroup.com or call us on 0800 055 6586.

Author

Richard Whittington

Richard Whittington

Head of Digital Products

Richard is a highly accomplished Learning and Development professional, with over 15 years of experience…

View articles by author

Subscribe to the Unicorn newsletter for the latest updates

Please complete missing fields or check information is correct.