Section 3.6 - FCA supervision and redress

Question 1

What catogeries does the FCA allocate authorised firms to

Answer 1

• Fixed Portfolio firms
• Flexible portfolio firms
• Where the FCA has serious concerns about the circumstances of an authorized firm or about the way its business has been conducted, the FCA can vary or cancel that firms Part 4a permission

Question 2

What does the FSA allow the FCA to do

Answer 2

• It gives the FCA the power to ban products that it believes provide an unaxcceptable risk to consumers.
• The FCA may temporarily ban a product for 12 months without consultation
• The FCA also has the power to prosecute a number of offences through the criminal court including:
• Insider dealing (part V of the Criminal Justice Act)
• Carrying out regulated activites without authroisation
• Failing to cooperate with or giving false infomation to an FCA appointed investigator

Question 3

What must a firm do when it recieves a complaint

Answer 3

• By the end of of the eight weeks after the complaint has been recieved, it must be sent to the FOS with an:
• a final response
• a written response

Question 4

What must do in terms of reporting complaints

Answer 4

• A firm must retain records of complaints for at least 5 years for MiFID business and 3 years for others.
• Must also provide the FCA with a biannual report with number of complaints

Question 5

What is the FOS

FOS - Financial Ombudsman Service

Answer 5

• The FOS aims to facilitate the settlement of disputes between a customer and a firm where a complaint has not been resolved to the satisifaction of the complaint.
• The scheme can be used by a customer where a complaint has not been settled within 2 months

Question 6

What are the two types of jurisdiction of the FOS

Answer 6

• Complusory juridiction - Firms regulated by the fca
• Voluntary juridcition

Question 7

What is the maximum money award the FOS can make

Answer 7

• £375,000

Question 8

What is the responsibility of the FSCS

FSCS - Financial Services Compensation Scheme

Answer 8

• Deals with claims against authorized firms that are insolvent or no longer trading
• It deals with eligable claims relating to:
• designated investment business
• Activites of managers or trustees of authorized unit trusts

Question 9

When should a complaint be brought to the FSCS

Answer 9

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

Question 10

What is the maximum award for the FSCS

Answer 10

£85,000