Every FCA-Regulated Firm Has Compliance Breaches. The Ones That Face Enforcement Are the Ones That Didn't Have a Framework for Managing Them.
Under SYSC 6.1.1R every FCA-authorised firm must maintain effective compliance arrangements, including appropriate resources and procedures for identifying and managing regulatory failures. The FCA doesn't expect perfection. It expects systems. When something goes wrong — a control fails, a regulatory requirement is missed, a customer is harmed — the question the regulator asks isn't just what happened. It's whether the firm detected it, reported it correctly, investigated it thoroughly, remediated it properly, and prevented it from recurring. Firms that can answer yes to all five don't just survive supervisory scrutiny. They demonstrate the culture of accountability the FCA increasingly considers as important as the breach itself. This comprehensive Compliance Breach Policy gives FCA-regulated firms a complete framework covering every stage from detection through investigation, classification, regulatory notification, remediation, and closure — built around SYSC, SUP 15, and the Senior Managers regime standards that apply right now.
The FCA doesn't punish firms for having breaches. It punishes firms for not knowing how to handle them.
What's included: Full regulatory mapping — SYSC 3.1.1R/3.2.6R/4.1.1R/6.1.1R/6.1.2G/9.1.1R/10.1.3R, SUP 15.3.1R/15.3.8R/15.11, PRIN 3/6/11, FSMA 2000, SM&CR SYSC 24/26/27, COCON 2.1.1R, UK GDPR/DPA 2018, ICO 72-hour data breach obligation · Five breach categories — conduct/customer treatment, financial crime/AML, prudential/capital, governance/systems, market conduct/integrity — with sector-specific examples across Consumer Credit/Insurance/Investment/Payment Services/Cryptoassets · Four-tier severity classification (Critical/High/Medium/Low) — Critical: >£50,000 customer detriment or authorisation risk; High: £10,000-£50,000 or 100+ data subjects; Medium: <£10,000 or contained operational error; Low: administrative with no material consequence — with five-factor assessment matrix · Multi-layer breach detection framework — automated transaction monitoring, client communication surveillance, system access logging, regulatory return validation, real-time financial crime screening — plus manual file review, supervisory oversight, complaint analysis · Mandatory 2-hour verbal notification / 24-hour written report standard · Four-level escalation matrix — Line Manager through Board Emergency Meeting — with regulatory reporting triggers at each level · Investigation team independence requirements — appointment within 24 hours, no involvement in activities under investigation, external legal counsel for Level 3+ breaches · Three-phase investigation methodology — information gathering, analysis/assessment, root cause analysis — with evidence chain of custody requirements · Regulatory notification content requirements under SYSC 10.1.3R — FRN, breach description, customer impact, immediate actions, root cause, contact details — plus 30-day follow-up update standard · Sector-specific notification thresholds — financial crime (immediate), data protection (72 hours), operational risk (same business day), conduct risk (immediate), prudential (immediate) · Customer remediation framework — identification, impact assessment, redress calculation, communication strategy, payment processing · Seven-year minimum retention for major breaches and remediation records · Training schedule — induction within 10 business days, annual role-specific within 30 days, regulatory updates within 15 days · Monthly/quarterly/semi-annual/annual governance review cycle · Ready-to-use appendices: Compliance Breach Incident Form (fully structured with classification checkboxes), Breach Investigation Report Template, Product Compliance Assessment Matrix across six regulatory regimes
Built for: Compliance Officers, SMF16/17 holders, Risk Managers, and Boards of FCA-regulated firms who need a complete, SYSC-aligned Compliance Breach Policy that satisfies regulatory supervisory expectations, establishes clear individual accountability under SM&CR, and gives the firm documented evidence of a functioning breach management culture.
Every FCA-Regulated Firm Has Compliance Breaches. The Ones That Face Enforcement Are the Ones That Didn't Have a Framework for Managing Them.
Under SYSC 6.1.1R every FCA-authorised firm must maintain effective compliance arrangements, including appropriate resources and procedures for identifying and managing regulatory failures. The FCA doesn't expect perfection. It expects systems. When something goes wrong — a control fails, a regulatory requirement is missed, a customer is harmed — the question the regulator asks isn't just what happened. It's whether the firm detected it, reported it correctly, investigated it thoroughly, remediated it properly, and prevented it from recurring. Firms that can answer yes to all five don't just survive supervisory scrutiny. They demonstrate the culture of accountability the FCA increasingly considers as important as the breach itself. This comprehensive Compliance Breach Policy gives FCA-regulated firms a complete framework covering every stage from detection through investigation, classification, regulatory notification, remediation, and closure — built around SYSC, SUP 15, and the Senior Managers regime standards that apply right now.
The FCA doesn't punish firms for having breaches. It punishes firms for not knowing how to handle them.
What's included: Full regulatory mapping — SYSC 3.1.1R/3.2.6R/4.1.1R/6.1.1R/6.1.2G/9.1.1R/10.1.3R, SUP 15.3.1R/15.3.8R/15.11, PRIN 3/6/11, FSMA 2000, SM&CR SYSC 24/26/27, COCON 2.1.1R, UK GDPR/DPA 2018, ICO 72-hour data breach obligation · Five breach categories — conduct/customer treatment, financial crime/AML, prudential/capital, governance/systems, market conduct/integrity — with sector-specific examples across Consumer Credit/Insurance/Investment/Payment Services/Cryptoassets · Four-tier severity classification (Critical/High/Medium/Low) — Critical: >£50,000 customer detriment or authorisation risk; High: £10,000-£50,000 or 100+ data subjects; Medium: <£10,000 or contained operational error; Low: administrative with no material consequence — with five-factor assessment matrix · Multi-layer breach detection framework — automated transaction monitoring, client communication surveillance, system access logging, regulatory return validation, real-time financial crime screening — plus manual file review, supervisory oversight, complaint analysis · Mandatory 2-hour verbal notification / 24-hour written report standard · Four-level escalation matrix — Line Manager through Board Emergency Meeting — with regulatory reporting triggers at each level · Investigation team independence requirements — appointment within 24 hours, no involvement in activities under investigation, external legal counsel for Level 3+ breaches · Three-phase investigation methodology — information gathering, analysis/assessment, root cause analysis — with evidence chain of custody requirements · Regulatory notification content requirements under SYSC 10.1.3R — FRN, breach description, customer impact, immediate actions, root cause, contact details — plus 30-day follow-up update standard · Sector-specific notification thresholds — financial crime (immediate), data protection (72 hours), operational risk (same business day), conduct risk (immediate), prudential (immediate) · Customer remediation framework — identification, impact assessment, redress calculation, communication strategy, payment processing · Seven-year minimum retention for major breaches and remediation records · Training schedule — induction within 10 business days, annual role-specific within 30 days, regulatory updates within 15 days · Monthly/quarterly/semi-annual/annual governance review cycle · Ready-to-use appendices: Compliance Breach Incident Form (fully structured with classification checkboxes), Breach Investigation Report Template, Product Compliance Assessment Matrix across six regulatory regimes
Built for: Compliance Officers, SMF16/17 holders, Risk Managers, and Boards of FCA-regulated firms who need a complete, SYSC-aligned Compliance Breach Policy that satisfies regulatory supervisory expectations, establishes clear individual accountability under SM&CR, and gives the firm documented evidence of a functioning breach management culture.
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