The deadline is still to be confirmed, but those in the know say it’s imminent. The implementation period could be anything from by the end of this year, to around about this time next year.
The FSA handbook states that the role must be allocated to an individual acting in the capacity of a director or senior manager within a firm. The CF10 has the responsibility of oversight of the firm’s compliance and has to report to the “governing body” (usually the board or partners) in respect of that responsibility.
Richard Farr, project director at Telos Solutions, is of the opinion that few brokers have thought hard enough about the implications of the incoming regulation. For the sole brokers, who oversee the entirety of their business in any case, the transition will be a matter of filling in an application form.
For large broker firms, with existing compliance departments and risk directors, the appointment of the CF10 role will be equally obvious. It is the medium sized firms which will need to think seriously about who takes on this role.
The question is, do you appoint someone with expertise in compliance, and consequently have to appoint them director in the business? Or do you appoint an existing director with less experience in compliance and risk management?
Farr says the issue hasn’t hit home with this type of firm as yet: they will be forced to develop their business structure to a stringent deadline rather than the usual organic evolution of a business.
He said: “The CF10 requires a good risk manager to fulfil the responsibility properly, but that person also has to be of senior management or director level in the business. The two things aren’t necessarily mutually exclusive in medium sized businesses. The best option may be to appoint an existing director and ensure that they have access to resource and external support for the function.”
