Reports by skilled persons
Produced in partnership with Sophie Walden of Linklaters
Reports by skilled persons

The following Financial Services practice note Produced in partnership with Sophie Walden of Linklaters provides comprehensive and up to date legal information covering:

  • Reports by skilled persons
  • Background
  • The power to require a report
  • The requirement notice
  • Cost
  • The power to collect or update information
  • The decision to invoke FSMA ss 166 or 166A—regulator considerations
  • The skilled person
  • Reporting
  • Duties of the firm
  • More...

Background

The power to require a firm to obtain a view from a third party (a ‘skilled person’) about aspects of a regulated firm’s activities under section 166 of Financial Services and Markets Act 2000 (FSMA 2000), as amended by the Financial Services Act 2012, is used regularly by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) as part of their regulatory toolkits.

Either the FCA or the PRA can use this power in circumstances where they require additional detailed information about a certain aspect of a firm's business and do not have the expertise or resource to conduct the work themselves, or where, for some reason, the firm is not likely to provide an objective view. The power can be used in support of supervisory or enforcement work.

The FCA or the PRA can commission two types of skilled person review:

  1. the appointment of a skilled person to produce a report under FSMA 2000, s 166, or

  2. the collection or updating of information by a skilled person under FSMA 2000, S 166A

The appropriate regulator can use the s 166 power for diagnostic, monitoring, remedial, or preventative purposes. A non-exhaustive list of examples of when the FCA may use the skilled person tool is set out in SUP 5 Annex 1. The appropriate regulator can use the s166A power where the regulator considers there has

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