Arrow Visits: Pitfalls and Handy Tips
On Tuesday 15th June 2010, avantage hosted the first of two roundtable events focusing on ARROW visits. In this session we looked at the new FSA approach to their supervision of firms and highlighted some practical advice on how to prepare for these visits.
In the first presentation Tomas Hazleton, SVP and Director of Risk Management-Europe, AllianceBernstein Limited provided his tips for good management of the ARROW visit based on a recent review.
Tomas stressed that the FSA is looking for evidence of the level of effectiveness of corporate governance within the Firm. Firms should be able to demonstrate effective challenge and that there exists within the firm an embedded culture of such challenge. His overall theme was the importance of beginning this process well in advance, taking the opportunity to identify potential red flags and taking action. Tomas recommended seeking assistance particularly around training – for him the greatest return lay in using mock interviews to prepare for an FSA visit.
This was followed by a lively roundtable discussion on the importance of proper process management before, during and after an ARROW visit. In addition many participants were interested in the mechanics and timing of the FSA review, as well as gaining an insight into how the FSA themselves manage the process behind closed doors (their internal planning and project management). It was noted that shorter turnaround times for information requests had been experienced than in the past. Other discussion included how to respond to enquiries into unregulated parent Firms; the level of understanding by the FSA of Firms and the importance of ensuring the FSA supervision team understands a Firm’s strategy and business model.
In the second presentation Iain Wright, Director, avantage (UK) Limited provided his insights into the new FSA approach to ARROW visits and current hot topics.
The evening was rounded off by a roundtable discussion on Hot Topics. Participants observed that the FSA is increasingly targeting Non Executive Directors and is becoming more probing and challenging than in the past. It was noted that there appears to be some degree of inconsistency in the way that the FSA conducts each review, it may depend of the presence or not of a specialist on the team, the Firm itself and the extent of the knowledge the FSA has about a particular Firm.
You can download a copy of the speaker presentations here.
The next ARROW round table will focus on Governance issues and will be held on 2nd September 2010. For further details and to pre-register please refer here.
You may also be interested in our Practice Note ‘FSA ARROW Reviews: Avoid the pitfalls and take early action’ a copy of which can be downloaded here.
