Governance Matters:

Through the recent publication of Market Watch 83 the FCA provided a timely reminder of the importance of good firm governance. Whilst Market Watch articles are targeted at investment firms with MAR and MiFID requirements, the key takeaways from this article could be applied to any regulated firm.

The article focuses on the core governance concepts of having adequate and proportionate systems and controls in place. Regardless of the size of your firm, it needs to be clear who is responsible for what and when. Written policies and procedures that are clear, concise and regularly reviewed and updated play a key role here. Staff should then be familiarised with the policies and procedures via training, with attestations employed to demonstrate understanding and compliance.

Firm structure and the importance of the separation of different functions were also highlighted as important and something the FCA would expect to see. Delineation between the 1st line (the business), 2nd line (compliance), 3rd line (internal audit) and ensuring each line reports to the correct individual or committee to prevent conflicts of interest developing is expected. Clear lines of escalation for issues, which are made known to staff and are transparent, also form part of the expectation here – along with appropriate tone from the top and the embedding of a compliance culture.

Market Watch 83 also makes clear the need for firms to implement adequate risk assessment and management processes. There is no guidance provided as to what this may entail, however, firms should ensure that the approach taken is proportionate for its size.

To learn more about good firm governance and best practices in the context of transaction reporting, using real life examples like the Infinox and Sigma fines, sign-up for and attend our in-person governance training on 3rd December 2025.