Regulatory:PRA & FCA Flashcards
What is the structure of the UK regulatory system?
- Bank of England: financial policy committee (FPC)
- Prudential Regulatory authority (PRA)
- financial conduct authority (FCA)
What does the Bank of England do?
Protects & enhances the stability of the financial system
Oversees FCA & PRA
What does the FPC stand for and what does it do?
- Financial policy committee
- removes/reduces systemic risks and enhances resilience
What does the PRA stand for and what does it do?
- Prudential regulatory authority
- promote safety and soundness from all films it regulates
- regulates insurers
What does FCA stand for and what does it do?
- Financial conduct authority
- ensures that relevant markets function well
- protect consumers
- promotes effective competition
Regulated brokers
What is the PRA approach when regulating?
- is forward looking: future risks
- focused on outcomes
- sets thresholds
- categorises their regulatees into highest risk
- measures the company takes to protect
- judgement
- solvency
They are also inline with Solvency ||
-supervisory programme: site visits
What is the FCAs approach to regulation?
- authorisation process
- conduct of members
- correct selling of products
- maintenance of standards and the monitoring
- complaints
- market analysis &a intelligence
Also responsible for:
FOS, TCF, FSCS, money advice scheme
What does the PRA look at when assuring a company takes adequate measures to protect its consumers?
- management
- culture
- risk management
- financial resources
- resolvability
What are the two specific principles with regard to the society of Lloyds
1) Lloyds market should be regulated to the same standard as the external market
2) Lloyds and all individual syndicates will both be supervised
What three pillars is the FCAs supervision model based on:
1) form systemic framework (FSF) - are interests of customers and market integrity at the heart?
2) event driven work: dealing quickly with problems
3) issues and products: fast work on areas that may put consumers at risk
Senior managers are held responsible
The handbooks
Conduct of business sourcebook (ICOBS) carried info FCA handbook
What are 11 principles of the Principles for Businesses?
1) I
2) S (c D)
3) Mc
4) FP
5) m
6) C
7) Com
8) COI
9) cust R
10) Client Ass
11) R&R
1) integrity
2) skill care and diligence
3) management and control
4) financial prudence
5) Market conduct
6) customers interests
7) communications with clients
8) conflicts of interest
9) Customers: relationship of trust
10) clients assets
11) relationships and regulators
Which of the 11 principles apply to an underwriter involved in day to day business underwriting
1) integrity
2) skill, care and diligence
3) communications of clients
4) customers: relationships of trust
What is a T&C regulated firm (relevant to underwriters) is expected to ensure?
1) competency from employees
2) employees remain competent for the work they do
3) employees are supervised
4) employees competence is reviewed
5) the level of competence is up to standard
In the eyes of the FCA which of the 11 PRIN principles is most important?
Number 6
A firm must pay due regard to the interests of its customers and treat them fairly
TCF is a theme that is central to the role of underwriter
