SUP 2.3 Information gathering by the FSA on its own initiative: cooperation by firms

The FSA uses various methods of information gathering on its own initiative which require the cooperation of firms:

1. (1)

   Visits may be made by representatives or appointees of the FSA. These visits may be made on a regular basis, on a sample basis, for special purposes such as theme visits (looking at a particular issue across a range of firms), or when the FSA has a particular reason for visiting a firm. Appointees of the FSA may include persons who are not FSA staff, but who have been appointed to undertake particular monitoring activities for the FSA (paragraph 6(2) of Schedule 1 to the Act). The FSA needs to have access to a firm's documents, personnel and business premises to carry out a visit.

2. (2)

   The FSA may seek meetings at the FSA's offices or elsewhere.

3. (3)

   The FSA may seek information or request documents by telephone, at meetings or in writing, including by electronic communication.

The FSA expects to request meetings or access to business premises during reasonable business hours. The FSA also normally expects to be able to give reasonable notice to a firm or connected person when it seeks information, documents, meetings or access to business premises. On rare occasions, however, the FSA may seek access to premises without notice. The prospect of unannounced visits is intended to encourage firms to comply with the requirements and standards under the regulatory system at all times.

In complying with Principle 11, the FSA considers that a firm should, in relation to the discharge by the FSA of its functions under the Act:

1. (1)

   make itself readily available for meetings with representatives or appointees of the FSA as reasonably requested;

2. (2)

   give representatives or appointees of the FSA reasonable access to any records, files, tapes or computer systems, which are within the firm's possession or control, and provide any facilities which the representatives or appointees may reasonably request;

3. (3)

   produce to representatives or appointees of the FSA specified documents, files, tapes, computer data or other material in the firm's possession or control as reasonably requested;

4. (4)

   print information in the firm's possession or control which is held on computer or on microfilm or otherwise convert it into a readily legible document or any other record which the FSA may reasonably request;

5. (5)

   permit representatives or appointees of the FSA to copy documents or other material on the premises of the firm at the firm's reasonable expense and to remove copies and hold them elsewhere, or provide any copies, as reasonably requested; and

6. (6)

   answer truthfully, fully and promptly all questions which are reasonably put to it by representatives or appointees of the FSA.

In complying with Principle 11, the FSA considers that a firm should take reasonable steps to ensure that the following persons act in the manner set out in SUP 2.3.3 G:

1. (1)

   its employees, agents and appointed representatives; and

2. (2)

   any other members of its group, and their employees and agents.

(See also, in respect of appointed representatives, SUP 12.5.3 G (2)).

The FSA normally expects to give reasonable notice of a visit (See SUP 2.3.2 G).

The cooperation that a firm is expected to procure from such suppliers is similar to that expected of the firm, in the light of the guidance in SUP 2.3.3 G to SUP 2.3.4 G, but does not extend to matters outside the scope of the FSA's functions in relation to the firm. SUP 2.3.5 R (2) also requires a firm to take reasonable steps regarding access to the premises of such suppliers.

When a firm appoints or renews the appointment of a supplier under a material outsourcing arrangement, it should satisfy itself that the terms of its contract with the supplier require the supplier to give the FSA access to its premises as described in SUP 2.3.5 R (2), and to cooperate with the FSA as described in SUP 2.3.7 R. The FSA does not consider that the 'reasonable steps' in SUP 2.3.7 R would require a firm to seek to change a contract, already in place when that rule was made by the FSA, until renewal of the contract.

The FSA will normally seek information from the firm in the first instance, but reserves the right to seek it from a supplier under a material outsourcing arrangement if the FSA considers it appropriate.

The FSA may ask a firm to provide it with information at the request of or on behalf of other regulators to enable them to discharge their functions properly. Those regulators may include overseas regulators or the Takeover Panel. The FSA may also, without notifying a firm, pass on to those regulators information which it already has in its possession. The FSA's disclosure of information to other regulators is subject to the obligation described in SUP 2.2.4 G (Confidentiality of information).

In complying with Principle 11, the FSA considers that a firm should cooperate with it in providing information for other regulators. Sections 169 (Investigations etc. in support of overseas regulator) and 169A (Support of overseas regulator with respect to financial stability) of the Act give the FSA certain statutory powers to obtain information and appoint investigators for overseas regulators if required (seeDEPP 7, EG 31 and FINMAR 12).