8A1 Law and regulation Flashcards
PRA abbreviation
Prudential Regulation AUTHORITY
What happens if firms breach rules?
PRA has the power to remove this authorisation and apply a range of other penalties.
UK regulatory structure split
- Financial Policy Committee
- Prudential Regulation Authority
- Financial Conduct Authority
Financial Policy Committee
Within the bank of England, responsible for macro-prudential regulation and watching emerging risks to the UK’s financial system.
Prudential Regulation Authority
Part of the Bank of England, which is
responsible for the micro-prudential regulation of firms (e.g., banks and insurers) – it will not seek to prevent all failures, but will ensure they fail without bringing down entire financial system
Financial Conduct Authority
Responsible for conduct of business regulation across FS industry and prudential regulation of small firms (e.g., IFAs and brokers)
How can intermediaries be regulated?
- Directly by FCA
- Become an appointed rep of an authorised firm (principal)
Stages of intermediary authroisation
- Making an application to the FCA to become authorised
- Assessment by FCA
- Authorisation
Strategic objective of the FCA
Protect and enhance confidence in UK financial system
FCA operational objectives
- Securing appropriate degree of protection for consumers
- Promoting effective competition
- Protecting and enhancing integrity of financial system
Where can you find the Principles of Businesses (PRIN)?
The FCA handbook
How many principles are in PRIN?
11
SM&CR abbreviation
Senior Managers and Certification Regime
What are the three key elements of SM&CR?
- Conduct rules
- Senior Managers Regime
- Certification Regime
Conduct rules (SM&CR) definition?
Minimum standards for behaviour in FS – applies to almost all employees who carry out FS activities, or
linked.
Who do conduct rules apply to?
Some Conduct Rules apply to all employees, while others only apply to senior managers.
What is the Senior Managers Regime
Every senior manager must have a ‘Statement of
Responsibilities’ that clearly says what they are responsible and accountable for
What is the certification regime?
Applies to employees with certification functions