Overview Pack

Question 1

Who are the HMT and what do they do?

Answer 1

HM Treasury
* Accountable to UK Government
* Oversees the FCA, PRA and the UK financial system incl. structure and legislation that governs it.
* Can appoint or dismiss the FCA board and chariman
* Can investigate the FCA’s operations and rule making.
* Can give exemption status to persons for regulated activities or ways in which regulated activities are carried out.
* Publishes research and review articles
* Creates rules and legislation.
* Published the Edinbrugh Reforms,

HM Treasury, the Government department responsible for financial and economic policy,

Question 2

Who are the FCA and what they do?

Answer 2

Financial Conduct Authority
* Established following the FSMA 2012
* They are financial regulators
* Has 12 Principles for Businesses
* Regulator of all financial frims not regulated by the PRA
* Accountable to the HMT and therefore the UK Government
* Power to investigate inside dealer and market abuse. Can create leagally binding rules on authorised firms. Can challenge unfair contracts (CRA 2015). Suspend individuals, Gather financial stability information. Ban products
* Aims to protect consumers, keep the industry stable and promote healthy competition
* It jointly oversees the FOS and jointy the FSCS with the PRA.
* Can appoint approved and authorised persons or prohibit individuals from doing so.
* Funded by fees of firms they regulated
* Are a private company (special permission to remove the Ltd)
* Must submit a two reports yearly to HMT covering its discharge of functions.
* Wont take action or develop rules that could hurt the UK’s reputation or standing in the international finanical community.
* Failure to regulate fairly and correctly results in Judicial Review and they can be held accountble for breaches.
* Assesses technical competance and individuals abilities in authorised firms. They can make judgement calls.
* Makes individual risk based assessments on how a firm can impact the financial sector.
* Created the FTOCs, UK MiFIR, SM&CR, COCON, FCA Handbook, MAR
* Publishes research,papers and studies
* Appoints the chair and other directors of the FOS and the FSCS.
* Will issue warnings both privately and publicly

Question 3

What are the FCAs 12 PRINs?

Answer 3

1. Integrity
2. Skill, Care and Dilligence
3. Management and Control
4. Finanicial Prudence
5. Market Conduct
6. Customers’ Interests
7. Communciation with clients
8. Conflicts of Interest
9. Customers Relationships of Trust
10. Clients’ Assets
11. Relations with Regulators
12. COnsumer Duty