FCAS Principles and Outcomes Flashcards
Overview
- the principles are high level standards that the FCA requested from firms.
- the Principles are prioritised rather than the rules of the FCA
- if there are any breaches of the principles the firm needs to give the FCA a heads up through their compliance officer
- the principles provide a tangibilie rating to achieve compliance with threshold condition 5 (Suitability) non compliance is not forbidden but would price they are not meeting as for and propper
Principles
1) integrity
2) skill care
3)management and control
4) financially prudent
5)market conduct
6) consumer interest
7)communications with clients
8) conflicts in interest
9) customer relationships of trust
10) clients assets
11) relations with the FCA
Kay culture drivers
Leadership - fair treatment of customers is central to the behaviours and values. They communicate messages and give staff adequate levels of support
Reward - the rewards packages are transparent and reward the fair treatment of customers and weights these heavily to other targets.
Recruitment training and competence - performance management place must include objectives for the individuals role and set out the behaviours and actions expected in order to reflect the strategy of the firm. - when hiring the fair treatment t if customers must be a key part.
Cultural drivers
Controls - firm must identity collect and interpret and use relevant management information to demonstrate and highlight the fair treatment of customers - the firm uses MI to show the FTC this is key to their risk framework.
Strategy - senior managers must still allocate enough time and resources even when they have tiger priorities
Decision making and challenge - firms policies must be open to be challenge from consumers and other teams
Leadership - the FTC
- leadership at all levels says the tone the FCA believes certain firms showed
Behaviours - listening and acting in feedback - allowed staff to Ann kindly flag when it wasn’t followed
- maintains thigh standards - going after employees that ding follow them
- demonstrates a strong commitment - they show it is important
- implementing the leadership - the CEO might set the a target for all staff based on it
Code of conduct
- they are intended to increase the standard for everyone in the financial
Services - FCA requires firms to roll these out.
- all employees need to be told about them.
- the FCA thinks that it increases accountability
- the FCA should be told if any staff are dismissed / told off due to not following the rules
Con con
- observe market rules
- pay reacts to the interest of customers
- act with sure sill care and dulleigence
- if the regulators ask you for information you need to provide it
- you must act with integrity
Senior manger conduct rules
Take reasonable able steps to ensure that the business of the firm for which you are responsibile is controlled - receding areas where senior managers would be responsible
- business complied with the standard - any breaches are reported, all staff aware of compliance and and external suggestions implemented
- reasonable steps for flea gato on of your responsibilities is to an appropriate person that you oversee the discharge of the delegates responsibility properly - only delegate where there is reasonable ground for believing that the delegate has the competence knwlnedge and time and skill to complete, taking steps to ensure that the delegation is appropriately documented and reporting lines are clear.
- Reporting to the FCA - reporting any info that has been requested
Approved persons
- most firms are joe included in the SM&C Regime where CONCON applies, the statements of principe and code of practice for approved persons apply to those that are not SM&CR firms or are appointed representatives.
- Approved persons are people who apply and are accepted for a registered activity ie Winston
Statmenr of principle for approved person
- they are people who are carrying out a controlled function and have and to be approved
- similar to COCON
1) act with integrity
2) skill care and dilegence
3) market conduct
4) regulator
An accountable higher management function - statements of principle for approved person
5 - organisation and control - must make sure that the business is organised and that it can be controlled effectively
6) skill fare and dillegeikce in Managing - must exercise skill care and diligence when manage if the business .
7 ) compliance must take reasonable steps to ensure that the business of the firm for which they are responsible in their accountable function complied with the relevant requirements and standards of the regulation
Other Factors in Measuring the Principles
- is their conduct considerate eitht eh requirements of the standard of the firm they are regulated under
- if there is any other rules in the handbook
Management function
- knowledge of the approved person had or should have had of the regulatory concerns if any arising in the business under their control
- the role and responsibility of the apprbed person performing accountable higher management function
FiT and proper test
An individual in a senecios management or certified position or an upriver person must be and remain fit and proper for their function under
- honestly integrity and reputation - based on employment history, criminal or disciplinary
Comperatance - met requirements for training and competence and can perform their senior management or certified function. Must demonstrate they are suitable for the role by their experience and training.
Financial soundness - the individual must have been finically sound in terms of their current status and their past performance.
The tests for the advisers are don’t bu the firm and senior managers by the FCA
If an individual does not follow the rules they could get a financial Penalty loose their job or not get another one.
If a firm believe that a person is no longer fit and proper it must take appropriate action and inform the FcA immediately. For an example if it was found that and adviser had misappropriated a clients money then the firm would be expected to dismiss the adviser and inform the FCA
