TICS: published for external use

In addition to using TICS internally, we publish TICS to provide transparency of our internal processes – and to provide a bar-raising resource to support professional advisers in meeting their regulatory research and due diligence responsibilities.

Professional advisers are expected to undertake robust issuer / counterparty research and due diligence. The regulatory expectations upon professional advisers are explicit. The following extracts are taken from the FCA Retail Product Development and Governance: Structured Product Review, 2012 Thematic Review:

‘‘Firms should carry out sufficient due diligence into the counterparty and not rely solely on credit rating agencies …’’

‘‘We expect firms to look more broadly than just the credit rating, such as the rating, outlook, credit default swap (‘CDS’) spreads and other market information, as well as ‘fundamentals’ on the issuer’s balance sheet.’’

TICS provides professional advisers with access to multiple, widely recognised indicators of financial strength / credit risk, pertinent to assessing and considering financial strength / credit risk, using a robust methodology, including a scoring system, provoking and supporting more detailed and objective analysis, consideration and understanding – including comparison – of issuer / counterparty financial strength / credit risk, supporting best practice professional adviser issuer / counterparty research and due diligence.

So, TICS is important.

Professional advisers using TICS should take the time to look at the ‘TICS: Introduction and overview’ and ‘TICS: Methodology (scoring and weighting)’  presentations.

It is also important that professional advisers using TICS understand what TICS is: and what TICS is not.