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ARTICLE · 02 MARCH 2018

UK Regulator Warns Firms To Improve Prudential Reporting

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On February 19, 2018, the Financial Conduct Authority published a new "Dear CEO" letter that it has sent to the Chief Executive Officers of certain firms for which it acts as prudential regulator.

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On February 19, 2018, the Financial Conduct Authority published a new "Dear CEO" letter that it has sent to the Chief Executive Officers of certain firms for which it acts as prudential regulator.

The letter is addressed to the CEOs of "IFPRU Firms" (firms solo-regulated by the FCA that fall within the definition of "investment firm" in the Capital Requirements Directive and which are subject to the requirements of CRDIV) and "BIPRU Firms" (firms solo-regulated by the FCA that fall outside the definition of "investment firm" for CRD IV purposes). The FCA has observed that the prudential returns (in particular the Common Reporting (COREP) and Financial Reporting (FINREP) returns) submitted by these firms often contain inaccurate or incomplete data. The FCA stresses that, while errors or omissions can appear minor in isolation, they can materially distort data that are aggregated and used to analyse a sector or a group of firms.

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