Chapter 1: The Regulatory Environment Flashcards
When did the FSMA 2000 come into effect?
2001
What Act established the Financial Ombudsman Service (FOS)?
Financial Services and Markets Act 2000
What Act established the Financial Services Compensation Scheme (FSCS)?
Financial Services and Markets Act 2000
What 5 things did the FSMA 2000 establish?
- The Financial Ombudsman Service (FOS)
- Two regulatory bodies (Financial Conduct Authority and Prudential Regulatory Authority)
- The Financial Services Compensation Scheme (FSCS)
- Penalties for Market Abuse
- Uk Listing Regime (UK Listing Authority, FSA)
What is the FCA responsible for?
The FCA is solely responsible for the authorisation and supervision of all financial institutions not regulated by the PRA, including intermediaries and investment exchanges.
What are the FCA’s statutory and operational objectives
Statutory objective - Ensure the market function well
Operational objectives -
1. The consumer protection objective
2. The integrity objective
3. The competition objective
What role does the FCA play?
- Protecting consumers
- Industry Stability
- Promoting Healthy Competition amoungst Financial Service Providers
What powers does the FCA have?
It has inherited the FSA’s powers to investigate and prosecute insider dealing and market abuse.
What does having a ‘Part 4A Permission’ grant you?
The ability to carry out regulated activites, as you are now considered to be an authorised person
What is the PRAs responsibility?
Prudential regulation of:
1. Banks
2. Building Societies
3. Credit Unions
4. Insurers
5. Major Invesment Firms
What is the FCA’s Strategic Objective?
Ensure the markets function well
What are the FCA’s Operational Objectives?
What are the 12 Principles of Business?
- INTEGRITY
- SKILL, CARE AND DILIGENCE
- MANAGEMENT AND CONTROL
- FINANCIAL PRUDENCE
- MARKET CONDUCT
- CUSTOMERS’ INTERESTS
- COMMUNICATION WITH CLIENTS
- CONFLICTS of INTEREST
- CUSTOMERS: RELATIONSHIP of TRUST
- CLIENTS’ ASSETS
- RELATIONS WITH REGULATORS
- CONSUMER DUTY
