GABRIEL Filings – FSA055 – Systems and Controls Questionnaire

Non-ILAS BIPRU firms, a term which also captures IFPRU limited-licence and limited activity firms, will be familiar with the FSA055 Systems and Controls Questionnaire which is required to be submitted to the FCA on an annual basis and within 15 business days of the calendar year end, regardless of the financial year end of the firm.

This return focuses on a firm’s ability to monitor and manage its liquidity risk. This is defined as “the risk that a firm, although solvent, either does not have available sufficient financial resources to enable it to meet its obligations as they fall due, or can secure such resources only at excessive cost”.

Firms are reminded that they must have in place an adequate liquidity risk management framework that meets the rules and guidance outlined in BIPRU 12.3 (’liquidity risk management’) and 12.4 (‘stress testing and contingent funding’). IFPRU and BIPRU firms, both ILAS BIPRU and non-ILAS BIPRU, are required to ensure that all risks within BIPRU 12.3 have been considered as appropriate.

Specific risks listed within section 6 of FSA055 (which is only relevant to non-ILAS BIPRU firms) include (Q16 – Q20):

  • Pricing liquidity risk;
  • Intra-day management of liquidity;
  • Management of liquidity across legal entities, business lines and currencies;
  • Funding diversification and market access; and
  • Management of collateral.

We understand that some firms that have answered “no” to these questions – because whilst such risks were considered they were not deemed to be relevant – have subsequently been contacted by the FCA with concerns about the adequacy of the liquidity risk management framework in place. In order to demonstrate to the FCA that these risks have been considered it is important that firms respond “yes” to the questions concerned, even if some or all of them are regarded as not being applicable.

 

HOW CAN WE HELP?

Complyport has experience in the preparation and submission of FCA GABRIEL filings. To find out more about how we can help with your Regulatory Reporting Requirements, please contact your usual consultant or e-mail us at info@Complyport.co.uk