The Financial Services Authority (FSA) issue Final Notices whenever they have disciplined or censured a firm or individual for whatever reason. The Principles are; Integrity: A firm must conduct its business with integrity. Skill, care and diligence: A firm must conduct its business with due skill, care and diligence. Management and control: A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems. Financial prudence: A firm must maintain adequate financial resources. Market conduct: A firm must observe proper standards of market conduct. Customers' interest: A firm must pay due regard to the interests of its customers and treat them fairly. Communications with clients: A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading. Conflicts of interest: A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client. Customers: relationships of trust: A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment. Clients' assets: A firm must arrange adequate protection for clients' assets when it is responsible for them. Relations with regulators: A firm must deal with its regulators in an open and cooperative way, and must disclose to the FSA appropriately anything relating to the firm of which the FSA would reasonably expect notice. The cost of complying with the regulations may seem expensive and some even see it as a lost cost, however, if you fail to run your business compliantly due to ignorance, arrogance or some other reason be it personal, cultural or even political; make sure you have plenty of spare cash in your savings account.

1. The Price
of Breaching the FSA Principles
A CEI Compliance Information Presentation

2. The FSA A Principled Regulator
The Financial Services Authority (FSA) issue Final Notices whenever
they have disciplined or censured a firm or individual for whatever
reason.
In November 2012 the FSA imposed a £10.5 million fine on Card
Protection Plan Limited (CPP) for the mis-selling of insurance
products.
The firm has also agreed to pay redress to its affected customers and
it estimates that this will amount to approximately £14.5m, however,
this figure could change depending on how many customers respond
to CPP’s contact exercise. The total cost to the firm of the FSA’s
investigation is estimated to be £33.4m, which includes the fine,
redress and the overall costs associated with the investigation.
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3. The FSA A Principled Regulator
The FSA’s Final Notice to CPP details that the firm was
found to have breached Principles 3 (Management and
Control), 6 (Customers’ Interests) and 7 (Communications
with Clients) of the regulator’s Principles for Businesses.
CPP failed to treat its customers fairly and did not provide
clear information to its customers:
• CPP sold its Card Protection product by emphasising
that customers would benefit from up to £100,000
worth of insurance cover – when this was not needed
because customers were already covered by their
banks; and
• CPP overstated the risks and consequences of identity
theft during sales of its Identity Protection product.
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4. The FSA A Principled Regulator
Whilst the details are interesting and obviously relevant
to the company’s either ignorance or arrogance, the end
result was due to a failure of the FSA Principles, a list of
11 time forged values that firms, even today still breach
fairly consistently, and always at their cost.
Earlier in the same week they also fined another firm
with a financial penalty of £412,000 in respect of
breaches of Principle 3 (Management and Control),
Principle 9 (Customers: Relationships of Trust) of the
FSA’s Principles for Businesses (“the Principles”). So what
are these principles?
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5. The FSA Principles for Business
1. Integrity: A firm must conduct its business with integrity.
2. Skill, care and diligence: A firm must conduct its business with
due skill, care and diligence.
3. Management and control: A firm must take reasonable care to
organise and control its affairs responsibly and effectively, with
adequate risk management systems.
4. Financial prudence: A firm must maintain adequate financial
resources.
5. Market conduct: A firm must observe proper standards of
market conduct.
6. Customers' interest: A firm must pay due regard to the interests
of its customers and treat them fairly.
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6. The FSA Principles for Business
7. Communications with clients: A firm must pay due regard to the
information needs of its clients, and communicate information
to them in a way which is clear, fair and not misleading.
8. Conflicts of interest: A firm must manage conflicts of interest
fairly, both between itself and its customers and between a
customer and another client.
9. Customers: relationships of trust: A firm must take reasonable
care to ensure the suitability of its advice and discretionary
decisions for any customer who is entitled to rely upon its
judgment.
10. Clients' assets: A firm must arrange adequate protection for
clients' assets when it is responsible for them.
11. Relations with regulators: A firm must deal with its regulators in
an open and cooperative way, and must disclose to the FSA
appropriately anything relating to the firm of which the FSA
would reasonably expect notice.
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7. The FSA A Principled Regulator
Not only Firms are bound by these Principles and
there are a long list of people who have realised
that regulatory censure can be costly, more
recently such as;
October 2012
Martin Edward Rigney £117,330 for failing to
comply with Statements of Principle 1, 2 and 7;
John Blake £100,000 for failing to comply with
Principle 3
Graeham Stuart Sampson £17,850 for breaching
Principle 6
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8. The FSA A Principled Regulator
Additionally, if the recipient is
financially embarrassed and any fine
would cause financial hardship then a
public censure is promulgated as in
the unrelated cases of Reverend
Carmel Jones breaching Principle 1
(integrity) and Raymond Wagner for
also breaching Principle 1.
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9. The FSA A Principled Regulator
The cost of complying with the
regulations may seem
expensive
and some even see it as a lost
cost,
however, if you fail to run your
business compliantly due to
ignorance, arrogance or some
other reason be it personal,
cultural or even political;
make sure you have plenty of
spare cash in your savings
account.
Call 0800 689 9 689

10. What Is This Presentation
This is a regulatory summary service
provided by CEI Compliance Limited, The
UK’s Fastest Growing Alternative
Regulatory Consultancy
We can only advise on the salient points in
this summary and if you want further
details then we would suggest you access
the full document from the BBA Website
at
http://www.bba.org.uk/downloads/bba/St
reamline_Consultation.pdf
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11. So Who Are CEI
Compliance? The Fastest Growing
Alternative UK
Regulatory
CEI Compliance have been providing Consultancy
risk and compliance services to all
sizes of regulated firms from start-up
banks and FTSE100 companies to IFAs
and small Wealth Managers. Provide a Discrete
Service for Remedial
and Proactive Risk &
Compliance
The key to our success is that those
who need to know refer us to others.
We are a well kept secret who places
confidentiality and honesty as two of
Have an Ultimate
their highest values. Goal of Improving
Our Client’s Position
Big enough to be
credible,
Small enough to care
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12. Areas of Working
Because of our reputation of Areas of Work
discretion and confidentiality we Remedial with NDA
operate under Non-Disclosure
Agreements for roughly 2/3rds of
our work Governance with no
NDA
External to this the breakdown of
our work is roughly split with 50% 62%
Risk & Compliance and 50%
Governance. 21%
8% 9%
CEI Also trade under Compliance
Consultant
(www.complianceconsultant.org) and
S166 Reports (www.S166reports.co.uk) Source: CEI Stats June 2012
as separate businesses.
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13. Isn’t Bigger, Better?
Generally, No.
It’s usually just more expensive
Fortunately, there are more positive alternatives to
using a niche consultancy compared to the Accentures,
McKinseys or the big accountancy firms like Deloitte, E&Y
etc.
We not only consider that size doesn’t matter, but large
size can actually be a disadvantage in meeting your
needs.
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14. Dealing with a niche consultancy
You are always dealing with the principal when you are
dealing with my firm. This means that I, the MD, are the
relationship manager and there is no junior partner to whom
responsibility will be transferred. There is no decreased
accountability, no "hand-off" to a less-informed colleague. If
your interests are at stake continually, shouldn’t you
reasonably expect my continual involvement?
We can usually provide resources on a "just in time"
basis. That is, our projects do not have to cover excessive
overhead, such as multiple offices, large administrative
backup, recruiting, partner perks, etc. We are organised to
efficiently provide everything that you, as the buyer needs, but
nothing more than that which means that you are paying for
value and results and only minimum overhead.
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15. Dealing with a niche consultancy
There is more likelihood of your privacy and
confidentiality being observed with fewer people
working on the project. We (and/or the few people we
might also involve) are constant which means that there
isn’t the need to sift through dozens of differing
perceptions.
We’re faster. We can respond to requests quickly, and
return all calls within four hours which means to you
that there is no need to worry about a bureaucracy,
delays and unknown people on the other end of the
phone.
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16. Dealing with a niche consultancy
Since we handle fewer concurrent projects than larger firms,
our attention is focused on the job at hand. This means that
you don’t have to "compete" with another dozen or so of our
clients, which may be larger, paying more or are more time-
demanding. We structure our work so that every client
receives maximum attention.
Your investment is controlled. There is no "meter
running". We work for a fixed, value-based, project fee.
Large firms can’t afford to do that as readily because of all the
people involved and their own insistence on measuring their
success by billable hours. We measure our success by client
objectives reached, not in “time units”.
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17. Dealing with a niche consultancy
The expertise that larger firms use is often white-labelling
for them by a pool of consultants available in the
marketplace at any one time. We select our consultants
from practising subject matter experts which
means that you obtain the same or better expertise for
less money, because;
Inevitably, we are less expensive. There are
economies to using someone who can base their fees on
each situation and not on a pre-determined service scale
or need for reaching a practice quota. This means quite
simply better value to you.
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18. And, additionally
The benefits of dealing with the “Compliance
Doctor” and CEI Compliance is;
A firm with experienced and qualified
consultants;
A firm that can apply changes and needs in a
common sense way that is practical and
effective;
A firm that is considered and respected as
independent and reliable by the FSA;
A firm that provides you with unfettered access
to the principle immediately and on demand;
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19. What Makes Us Different?
Phase 1 We will conduct an initial appraisal at our cost
– only charging for expenses
Phase 2 We will make a proposal based on our
appraisal with your outcomes and needs
Phase 3 We will discuss the precise scope with you
and provide you with a project price
We will complete the work to your original
Phase 4 scope and satisfaction
Each proposal deserves
to be as unique as a
fingerprint

20. Who Are Our Clients?
text.
We have a wealth of Financial Services Experience, and
due to the remedial and sensitive nature of our work
forming over 60% of our business and that is conducted
under a Non Disclosure Regime, we cannot demonstrate
every client.

21. Who Are Our Clients?
We also have a large
amount of experience in a
number of other fields and
industries within the major
utilities and even Local
Authorities.

22. Questions? More Information?
CEI Compliance Limited
www.cei-compliance-limited.co.uk
Call
0800 689 9 689
Email
info@ceicompliance.co.uk