1. The Priceof Breaching the FSA PrinciplesA CEI Compliance Information Presentation

2. The FSA A Principled RegulatorThe Financial Services Authority (FSA) issue Final Notices wheneverthey have disciplined or censured a firm or individual for whateverreason.In November 2012 the FSA imposed a 10.5 million fine on CardProtection Plan Limited (CPP) for the mis-selling of insuranceproducts.The firm has also agreed to pay redress to its affected customers andit estimates that this will amount to approximately14.5m, however, this figure could change depending on how manycustomers respond to CPPs contact exercise. The total cost to thefirm of the FSAs investigation is estimated to be 33.4m, whichincludes the fine, redress and the overall costs associated with theinvestigation. Call 0800 689 9 689 3. The FSA A Principled RegulatorThe FSAs Final Notice to CPP details that the firm wasfound to have breached Principles 3 (Management andControl), 6 (Customers Interests) and 7 (Communicationswith Clients) of the regulators Principles for Businesses.CPP failed to treat its customers fairly and did not provideclear 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.Call 0800 689 9 689 4. The FSA A Principled RegulatorWhilst the details are interesting and obviously relevantto the companys either ignorance or arrogance, the endresult was due to a failure of the FSA Principles, a list of11 time forged values that firms, even today still breachfairly consistently, and always at their cost.Earlier in the same week they also fined another firmwith a financial penalty of 412,000 in respect ofbreaches of Principle 3 (Management and Control),Principle 9 (Customers: Relationships of Trust) of theFSAs Principles for Businesses (the Principles). So whatare these principles? Call 0800 689 9 689 5. The FSA Principles for Business1. 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.Call 0800 689 9 689 6. The FSA Principles for Business7.Communications with clients: A firm must pay due regard to theinformation needs of its clients, and communicate informationto them in a way which is clear, fair and not misleading.8. Conflicts of interest: A firm must manage conflicts of interestfairly, both between itself and its customers and between acustomer and another client.9. Customers: relationships of trust: A firm must take reasonablecare to ensure the suitability of its advice and discretionarydecisions for any customer who is entitled to rely upon itsjudgment.10. Clients assets: A firm must arrange adequate protection forclients assets when it is responsible for them.11. Relations with regulators: A firm must deal with its regulators inan open and cooperative way, and must disclose to the FSAappropriately anything relating to the firm of which the FSAwould reasonably expect notice. Call 0800 689 9 689 7. The FSA A Principled RegulatorNot only Firms are bound by these Principles andthere are a long list of people who have realisedthat regulatory censure can be costly, morerecently such as;October 2012Martin Edward Rigney 117,330 for failing tocomply with Statements of Principle 1, 2 and 7;John Blake 100,000 for failing to comply withPrinciple 3Graeham Stuart Sampson 17,850 for breachingPrinciple 6 Call 0800 689 9 689 8. The FSA A Principled RegulatorAdditionally, if the recipient isfinancially embarrassed and any finewould cause financial hardship then apublic censure is promulgated as inthe unrelated cases of ReverendCarmel Jones breaching Principle 1(integrity) and Raymond Wagner foralso breaching Principle 1. Call 0800 689 9 689 9. The FSA A Principled RegulatorThe cost of complying with theregulations may seemexpensiveand some even see it as a lostcost,however, if you fail to run yourbusiness compliantly due toignorance, arrogance or someother reason be itpersonal, cultural or even political;make sure you have plenty ofspare cash in your savingsaccount. Call 0800 689 9 689 10. What Is This Presentation This is a regulatory summary service provided by CEI Compliance Limited, The UKs 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.pdfCall 0800 689 9 689 11. So Who Are CEICompliance?The Fastest Growing Alternative UKRegulatoryCEI Compliance have been providing Consultancyrisk and compliance services to allsizes of regulated firms from start-upbanks and FTSE100 companies to IFAsand small Wealth Managers.Provide a Discrete Service for Remedial and Proactive Risk & ComplianceThe key to our success is that thosewho need to know refer us to others.We are a well kept secret who placesconfidentiality and honesty as two ofHave an Ultimatetheir highest values. Goal of Improving Our Clients PositionBig enough to becredible,Small enough tocare Call 0800 689 9 689 12. Areas of WorkingBecause of our reputation of Areas of Workdiscretion and confidentiality weRemedial with NDAoperate under Non-DisclosureAgreements for roughly 2/3rds ofour work Governance with no NDAExternal to this the breakdown ofour work is roughly split with 50%62%Risk & Compliance and 50%Governance. 21%8%9%CEI Also trade under ComplianceConsultant(www.complianceconsultant.org) andS166 Reports (www.S166reports.co.uk)Source: CEI Stats June 2012as separate businesses. Call 0800 689 9 689 13. Isnt Bigger, Better?Generally, No.Its usually just more expensiveFortunately, there are more positive alternatives tousing a niche consultancy compared to theAccentures, McKinseys or the big accountancy firms likeDeloitte, E&Y etc.We not only consider that size doesnt matter, but largesize can actually be a disadvantage in meeting yourneeds. Call 0800 689 9 689 14. Dealing with a nicheconsultancyYou are always dealing with the principal when you aredealing with my firm. This means that I, the MD, are therelationship manager and there is no junior partner to whomresponsibility will be transferred. There is no decreasedaccountability, no "hand-off" to a less-informed colleague. Ifyour interests are at stake continually, shouldnt youreasonably expect my continual involvement?We can usually provide resources on a "just in time"basis. That is, our projects do not have to cover excessiveoverhead, such as multiple offices, large administrativebackup, recruiting, partner perks, etc. We are organised toefficiently provide everything that you, as the buyer needs, butnothing more than that which means that you are paying forvalue and results and only minimum overhead.Call 0800 689 9 689 15. Dealing with a nicheconsultancyThere is more likelihood of your privacy andconfidentiality being observed with fewer peopleworking on the project. We (and/or the few people wemight also involve) are constant which means that thereisnt the need to sift through dozens of differingperceptions.Were faster. We can respond to requests quickly, andreturn all calls within four hours which means to youthat there is no need to worry about a bureaucracy,delays and unknown people on the other end of thephone. Call 0800 689 9 689 16. Dealing with a nicheconsultancySince we handle fewer concurrent projects than largerfirms, our attention is focused on the job at hand. This meansthat you dont have to "compete" with another dozen or so ofour clients, which may be larger, paying more or are moretime-demanding. We structure our work so that everyclient receives maximum attention.Your investment is controlled. There is no "meterrunning". We work for a fixed, value-based, project fee.Large firms cant afford to do that as readily because of all thepeople involved and their own insistence on measuring theirsuccess by billable hours. We measure our success by clientobjectives reached, not in time units. Call 0800 689 9 689 17. Dealing with a nicheconsultancyThe expertise that larger firms use is often white-labellingfor them by a pool of consultants available in themarketplace at any one time. We select our consultantsfrom practising subject matter experts whichmeans that you obtain the same or better expertise forless money, because;Inevitably, we are less expensive. There areeconomies to using someone who can base their fees oneach situation and not on a pre-determined service scaleor need for reaching a practice quota. This means quitesimply better value to you.Call 0800 689 9 689 18. And, additionallyThe benefits of dealing with the ComplianceDoctor and CEI Compliance is;A firm with experienced and qualifiedconsultants;A firm that can apply changes and needs in acommon sense way that is practical andeffective;A firm that is considered and respected asindependent and reliable by the FSA;A firm that provides you with unfettered accessto the principle immediately and on demand; Call 0800 689 9 689 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 afingerprint 20. Who Are Our Clients?text.We have a wealth of Financial Services Experience, anddue to the remedial and sensitive nature of our workforming over 60% of our business and that is conductedunder a Non Disclosure Regime, we cannot demonstrateevery 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 Limitedwww.cei-compliance-limited.co.uk Call0800 689 9 689Email info@ceicompliance.co.uk