FCA Supervision and Redress

Question 1

What legislation gave the FCA supervision and enforcement powers?

Answer 1

FSMA 2000

& additionally Financial services act 2012

Question 2

What do the FCA powers under FSMA 2000 grant?

Answer 2

The right to:
o To demand the production of information/conduct investigations
o To issue private warnings, public statements, financial penalties and vary or cancel a firm’s part 4A permission
o Appeals can be done through the Tax and Chancery chamber of the Upper Tribunal (TCCUT)
o Also has the power to prosecute offences through the criminal courts:

Question 3

When can the FCA prosecute offences through the criminal courts?

Answer 3

 Carrying on unautharised investment business
 Issuing an unapproved financial promotion
 Failing to co-operate with/misleading the FCA
 Insider dealing
 Breaches of the monetary laundering regulations

Question 4

What powers were granted to the FCA under the Financial Services act 2012

Answer 4

 Ban products that provide unacceptable risks

 Ban misleading financial promotions

Question 5

What must all firms have in reference to handling complaints?

Answer 5

A firm must have written complaints handling procedures

Question 6

When must a response be made for a complaint and what must this be?

Answer 6

o Within eight weeks of receiving a complaint, a firm must send the complaint:

• A final response; or
• A written response (informing the complainant of their right to approach the Financial Ombudsman Service – FOS)

Question 7

What must firms do in terms of reporting complaints?

Answer 7

Firms must provide reports on complaints received to the FCA twice a year

Question 8

What is the responsibility of the financial Ombudsman Service (FOS)?

Answer 8

• A scheme to facilitate the settlement of disputes where a complaint has not been resolved to the satisfaction of the complainant

Question 9

What is the jurisdiction of the financial Ombudsman Service (FOS)?

Answer 9

o Compulsory: firms regulated by the FCA

o Voluntary: firms sign up to joint voluntary jurisdiction by contractual agreement with the FOS

Question 10

How soon after its occurrence must a complaint be referred to the financial Ombudsman Service (FOS)?

Answer 10

A complaint must be referred to the FOS within six months of the firms’ final response

Question 11

What is the maximum award from the financial Ombudsman Service (FOS)?

Answer 11

£355,000 (+costs)

Question 12

What is the responsibility of the Financial Services Compensation Scheme (FSCS)?

Answer 12

Deals with claims against insolvent authorised firms that are no longer trading

Question 13

What claims does the Financial Services Compensation Scheme (FSCS) deal with?

Answer 13

• Eligible claims (‘protected investment business’)
o Claims relating to:
- Designated investment business
- Activities of managers or trustees of authorised unit trusts
- Activities of the authorised corporate director (ACD) or depositary of an ICVC/OEIC

Question 14

In what timeframe must a complaint be made to the Financial Services Compensation Scheme (FSCS) ?

Answer 14

Within 6 years of the date on which the event giving rise to the claim occurred

Question 15

What is the maximum award from the (FSCS)?

Answer 15

£85,000