Smaller firms missing TCF deadline

FSA report shows smaller firms not adhering to TCF deadlines.

In its latest progress report on its Treating Customers Fairly (TCF) initiative, the UK’s Financial Services Authority (FSA) has shown that although larger firms are complying with the initiative, smaller firms are failing to meet set deadlines. The FSA detailed firms' performance against their first deadline of last March - firms had to show they were implementing the necessary changes in their most affected business areas. The report showed that 93% of major retail firms, 87% of medium-sized retail firms and 74% of wholesale firms (where TCF is relevant) met the deadline, but that this compliance was only 41% in small firms. “We are encouraged that senior management in very many firms are showing strong commitment to TCF and are rising to the challenge of a more principles-based approach to regulation,” says Sarah Wilson, director with responsibility for TCF at the FSA. “Following the report we will intensify our supervisory focus on any firm that has failed to sufficiently engage with TCF and include the use of enforcement where necessary. Most particularly, in addition to all that is already available to them, we will increase our efforts to assist small firms. Given their size and structure these firms can make rapid progress if they engage.”The FSA has also announced a new deadline of December 2008 for all firms to have completed their work on TCF and to then be able to demonstrate that they are consistently treating their customers fairly. The FSA says it is devoting more resources to ensuring the new deadline is met and is developing a framework, for identifying potential TCF risk areas, to use when testing firms. Supervisors will also include a greater amount of detailed testing in their regular work.