Year end reporting requirements

Bovill

 

Following year-end, regulated firms are required to complete a number of returns, notifications and other tasks summarised below. Not all of these may be relevant to your firm, but we can help you identify which are necessary and help you to prepare and file these.

 

Reports and notifications to be submitted to the FCA

Submission deadline Submission method Comments
1. Annual Report and Accounts Within 80 business days Via FIN-A report in GABRIEL Under UK GAAP you have to include any breaches of your regulatory capital requirements. Should this be applicable you may want to discuss it with us and/or your auditors.
2. Auditor’s Client Assets Report Within 4 months Various methods – please get in touch Required even if you do not hold client money or assets.
3. Annual Controllers Report Within 4 months Via GABRIEL Sets out changes to Controllers since the last annual report.  Required even if there were no changes.  Does not replace the need to obtain prior permission or make notifications on an event-driven basis.
4. Annual Close Links Report Within 4 months Via GABRIEL Sets out changes to Close Links since the last annual report.  Required even if there were no changes.  It should be accompanied by a group structure chart unless you have no Close Links.
5. Standing Data Accuracy Check Within 30 business days Via CONNECT Firms must check the accuracy of data held by the FCA, for example on the Financial Services Register.
6. Appointed Representatives Within 4 months Annotated copy of the entry in the Financial Services Register by post or email Not required if you do not have any Appointed Representatives as at your financial year-end and the Financial Services Register accurately reflects this.
7. REP-CRIM financial crime data return Within 60 business days Via GABRIEL Applicable to all firms subject to the Money Laundering Regulations (MLR). However, for retail investment intermediaries, mortgage intermediaries, investment firms, consumer credit firms and electronic money institutions a materiality threshold is applied, such that this return is not required if you have revenue of under £5m calculated from all regulated and unregulated income, whether or not it comes from MLR-relevant business. Firms subject to the reporting requirement are only required to report REP-CRIM data for the areas of their business covered by the MLR.

Reports to the your Governing Body

  1. Annual Compliance Report

SYSC requires you to provide a written report to your Governing Body in respect of compliance on an at least annual basis.  The report should cover areas including your compliance policies and procedures and the risk management processes you have in place.  You may also wish to provide details of any compliance monitoring to be undertaken in the course of the next year.  We recommend a two-month timeframe for this report.

  1. Money Laundering Reporting Officer (‘MLRO’) Report

Your MLRO is required to submit a report to your Governing Body on an at least annual basis in respect of the operation and effectiveness of your firm’s anti-money laundering systems and controls.  We recommend a two-month timeframe for this report.

Review of prudential arrangements

  1. Review of ICAAP, Liquidity Risk Management Framework and Pillar 3 Disclosure [BIPRU / IFPRU firms only]

You need to review your ICAAP, Pillar 3 Disclosure and Liquidity Risk Management Framework at least annually.  Many firms choose to undertake these reviews to coincide with their financial year-end following production of annual management accounts.  When reviewing your ICAAP and Liquidity Risk Management Framework you should ensure that you update the stress and scenario testing to cover the next 3 to 5 years.  When updating your Pillar 3 Disclosure, ensure you include details of the remuneration arrangements of those employees who fall within the scope of the Remuneration Code.

If you are a significant IFPRU firm and so required to file your stress tests and scenario analysis with the FCA annually, these should be submitted within six months of your accounting reference date.

  1. Calculation of Fixed Overhead Requirement [BIPRU / IFPRU / AIFMD firms only]

Firms need to assess whether their expenditure is likely to change materially during the forthcoming year.

Review of your policies and procedures

  1. Compliance monitoring obligation
    The FCA requires you to assess regularly the adequacy and effectiveness of the measures you have put in place to comply with all applicable FCA rules, through compliance monitoring.If you have been affected by recent rule changes, this is a suitable time to satisfy yourself that you are complying with the new rules. Firms are encouraged to take a risk-based approach, so there are a number of ways in which Bovill can help:
  • Review and update your existing monitoring programme to ensure it is risk focused and fit for purpose.
  • Perform an independent compliance effectiveness review of any internal monitoring that you have conducted. We recommend that this is completed every two years at a minimum.
  • Conduct a monitoring review into one or more specific areas of your compliance arrangements and provide a report on any deficiencies. At the moment, we are seeing particular interest in the following areas (delete or add as necessary): MiFID II policies; remuneration; sanctions; reporting; client communications; etc. etc.
  • Provide a fully outsourced compliance monitoring review.

As the FCA imposes more (and larger) fines on individual board members and senior managers, we feel that compliance monitoring is probably the best investment a firm can make to protect itself and its board. Please get in touch if you would like to discuss any of the services outlined above.

  1. Remuneration Policy Statement [AIFMD / BIPRU / IFPRU firms only]

You should review and update your Remuneration Policy Statement at least annually.  There is no prescribed timeframe for this. However, you should aim to have completed the exercise prior to the determination of final bonus amounts. If you are a firm that is required to provide a High Earners Report to the FCA annually [IFPRU firms, plus BIPRU and exempt CAD firms that are part of a UK lead regulated group containing a bank, building society or IFPRU firm] (in which case this ought to appear on your GABRIEL reporting schedule as “REP005 High Earners Report”) it should be submitted within four months of your accounting reference date. The XML format has to be used. We are able to assist by giving you an Excel template to complete and we can do the software conversion. We then send it back to you for final upload on GABRIEL.

  1. Annual review of compliance policies and procedures and customer KYC information

You may wish to tie in the annual review of your compliance policies and procedures with your financial year-end.

  1. Annual training needs assessment

Your year-end is also a good time to review the training requirements of Senior Management, Approved Persons and other staff.  You should identify any training requirements to ensure that all staff remain competent to undertake their roles – this may tie in with the staff appraisal process.  In this connection, the FCA expects that anti-financial crime training in particular is provided to all staff on a regular basis.

  1. Financial crime risk assessment

The FCA expects firms to regularly assess and document the financial crime risks presented by their business activities.  Many firms choose to do this at their year-end.

  1. Fitness and Propriety Check

You should regularly assess the fitness and propriety of all Approved Persons and notify the FCA of any information which could reasonably be considered material to an individual’s fitness and propriety.  In addition to implementing systems and controls to ensure that Approved Persons notify you of any such information as and when it arises, you may also wish to obtain an annual declaration from Approved Persons.

  1. Stewardship Code

If you are a firm that manages investments for professional clients which are not natural persons (for instance, for funds), you are required to disclose either on your website or (if you do not have a website) in another accessible form your commitment to comply with the Stewardship Code.  Should you not comply with the code, you must explain the reason for this and provide details of your alternative investment strategy.

If you would like any assistance with any of the items detailed above, or would like to discuss them in more detail, please let us know.  

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