Law / United Kingdom

Compliance: adequate policies and procedures, and a permanent and effective compliance function

FCA Handbook, SYSC 6.1

In force since 3 Jan 2018.

An AI sector rules rule binding private bodies.

Criminal exposure

No

Enforcement body

Financial Conduct Authority

Instrument type

a regulation made under an act

Obligation class

Governance

Audit expectation

continuous

Who audits it

Internal independent

As of 10 October 2026.

What it requires

• It reaches you if you are a firm to which the common platform requirements apply, which is every firm apart from an insurer, a UK ISPV, a managing agent and the Society unless a specific rule provides otherwise (SYSC 1 Annex 1 2.1R): establish, implement and maintain adequate policies and procedures sufficient to ensure compliance of the firm, including its managers, employees and appointed representatives, with its obligations under the regulatory system and for countering the risk that the firm might be used to further financial crime (SYSC 6.1.1R).
• If you are a common platform firm, taking into account the nature, scale and complexity of your business and the nature and range of financial services and activities undertaken in the course of your designated investment business, establish, implement and maintain adequate policies and procedures designed to detect any risk of failure by the firm to comply with its obligations under the UK law on markets in financial instruments, as well as associated risks, and put in place adequate measures and procedures designed to minimize such risks and to enable the FCA to exercise its powers effectively under that law (SYSC 6.1.2-AR).
• If you are a common platform firm, establish and maintain a permanent and effective compliance function which operates independently and which monitors on a permanent basis and assesses, on a regular basis, the adequacy and effectiveness of the measures, policies and procedures put in place under SYSC 6.1.2-AR and the actions taken to address any deficiencies in your compliance with your obligations; advises and assists the relevant persons responsible for carrying out your designated investment business to comply with your obligations under the UK law on markets in financial instruments; reports to the management body, at least on an annual basis, on the implementation and effectiveness of the overall control environment for your designated investment business, the risks that have been identified and the complaints-handling reporting as well as remedies undertaken or to be undertaken; and monitors the operations of the complaints-handling process and considers complaints as a source of relevant information (SYSC 6.1.3-AR).
• If you are a common platform firm, have the compliance function conduct an assessment on the basis of which it establishes a risk-based monitoring program that takes into consideration all areas of your designated investment business and any relevant ancillary services and ancillary activities, including relevant information gathered in the monitoring of complaints-handling, with priorities determined by the compliance risk assessment so that compliance risk is comprehensively monitored (SYSC 6.1.3-BR).
• If you are a common platform firm, ensure that the compliance function has the necessary authority, resources, expertise and access to all relevant information; that a compliance officer is appointed and replaced by the management body and is responsible for the compliance function and for any reporting as to compliance; that the compliance function reports on an ad-hoc basis directly to the management body where it detects a significant risk of failure by the firm to comply with its obligations under the UK law on markets in financial instruments; that the relevant persons involved in the compliance function are not involved in the performance of the services or activities they monitor; and that the method of determining their remuneration does not compromise their objectivity and is not likely to do so (SYSC 6.1.3-CR).
• If you are a firm which is not a common platform firm or management company and you carry on designated investment business with or for retail clients or professional clients, allocate to a director or senior manager the function of having responsibility for oversight of your compliance and of reporting to the governing body in respect of that responsibility (SYSC 6.1.4AR).

When LexLint raises it

When your app profile says your app provides financial services.

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