The SFC today published the findings of its review in a report which outlines a number of areas where it felt improvements needed to be made. It also warned that action will be taken against any firms it has found to have committed “serious breaches” of selling practice requirements.
In a statement, the regulator said the reviewed firms “have established procedures to enhance selling practices” but it “nevertheless identified deficiencies and shortcomings”.
Specifically, the SFC said areas identified for improvement are:
- management oversight, training and compliance monitoring;
- suitability assessment process;
- use of disclaimers and signing of declarations;
- compliance with the new Code of Conduct requirements; and
- eligibility verification of “professional investors.”
“Intermediaries involved in the sale of investment products play a vital role in helping investors make informed investment decisions, so it is critical that they maintain high standards of compliance with the selling practices requirements,” said SFC chief executive Ashley Alder.
“Management should critically review their policies and procedures to address any issues that are relevant to their firms.”
The SFC added it will continue to use a range of supervisory tools, including inspections and mystery shopping programmes to monitor compliance.
