SCARPs are complex financial products that provide income to customers but also expose them to the risk that they lose all or part of their initial capital.
According to FSA, between January 2007 and December 2009 Credit Suisse UK customers invested over GBP1 billion in SCARPs. However, during that period there were a number of serious failings in the systems and controls in respect of those sales.
Go deeper with GlobalData
Failings included: inadequate systems and controls in relation to assessing customers’ attitudes to risk; failing to take reasonable care to properly evidence the suitability of SCARPs for customers; and failing to monitor staff effectively to ensure that they took reasonable care when giving advice.
It is understood that 623 Credit Suisse clients were caught up in the failings.
Concerns were raised to the regulator during a supervisory visit to the firm and this led to a subsequent FSA enforcement investigation.
Tracey McDermott, acting director of enforcement and financial crime at FSA, said: "We have seen all too frequently the consequences of financial services firms failing to implement proper systems and controls to ensure their customers invest in suitable products.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData"A proper assessment of customers’ individual needs and circumstances is even more critical where firms are selling complex products like SCARPs," he added.
