2.1.3 The Principles of Good Regulation

Question 1

The Principles of Good Regulation support:

Answer 1

The strategic and operational objectives of the FCA and PRA, which both must have regard to. `

Question 2

Principle 1 - Efficiency and Economy

Answer 2

Resources need to be used in the most efficient way. The treasury can commission value-for–money reviews of their operations

Question 3

Principle 2 - Proportionality

Answer 3

ensuring a burden/restriction imposed on a person/activity is proportionate to the benefits expected as a result. To judge this, they take into account costs to firm and consumers. A main technique is to carry out.a cost-benefit analysis of proposed regulatory requirements

Question 4

Principle 3 - Sustainable Growth

Answer 4

Ensuring there is a desire for sustainable growth in the economy of the UK in med/lon term

Question 5

Principle 4 - Consumer Responsibility

Answer 5

Consumers should take responsibility for decisions

Question 6

Principle 5 - Senior Management Responsibility

Answer 6

Firm’s senior management is responsible for a business’ activities / regulatory compliance. Firms must make it clear who has what responsibility, and ensure their business can be adequately monitored/controlled

Question 7

Principle 6 - Recognising the differences in business carried on by different regulated persons

Answer 7

Exercise their functions in a way that recognises differences in the nature and objectives of businesses carried on by different persons subject to requirements imposed under FSMA

Question 8

Principle 7 - Openness and disclosure

Answer 8

Should publish, or require regulated persons publish, relevant market information. Reinforces market discipline and improves consumer knowledge

Question 9

Principle 8 - Transparency

Answer 9

Their functions should be transparent. Information should be provided around their regulatory decisions and must be open and accessible to the regulated community and general public