Category: Compliance & AML · Reviewed by Simon Temme, Account Executive · Last reviewed June 2026
A statutory power under FSMA section 166 for the FCA (or PRA) to require an authorised firm to obtain a report from a “skilled person” — typically a major accounting or consulting firm — on a defined area of concern, paid for by the firm.
A skilled persons review is an FCA-directed review of a defined topic by an independent third-party expert. The FCA appoints (or approves) a skilled person to investigate and report on a specified matter. The firm pays the fees. The skilled person can be either appointed by the firm (with FCA approval) under section 166(1) or appointed directly by the FCA under section 166A (introduced in 2013) where the FCA wishes to have direct control of the engagement.
FSMA sections 166 (Reports by skilled persons) and 166A (Appointment of skilled person to collect and update information). FCA Handbook, SUP 5 (Skilled persons).
The FCA issues a Requirement Notice specifying the scope of the review, the topics to be examined, the deadline for the report and the format. The skilled person reports to the FCA (and, where the firm has appointed, also to the firm). The report can cover any area of regulatory concern — financial crime systems, Consumer Duty implementation, governance, CASS, IT and operational resilience, complaint handling, regulatory reporting accuracy, and so on. Following the report, the FCA may use the findings to inform supervisory or enforcement action.
A “Lot” framework operates for FCA-direct appointments under section 166A, with pre-approved firms in defined specialist categories. Reports can lead to significant remediation programmes, often with attestation requirements from senior managers as VREQs.
A firm with material weaknesses in its CASS 5 client money controls might be subject to a section 166 review of its CASS framework — with the skilled person reporting on segregation, reconciliation, trust documentation, and management oversight. Remediation typically follows, with the SMF holder providing attestations to closure.
Financial Services and Markets Act 2000, sections 166, 166A. FCA Handbook, SUP 5.
By Matt Bartlett, Director, on 2026-06-11.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-11. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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