Topic 17 FCA's Aims & Activities Part 2 Flashcards
Why was the Consumer Duty principal of business brought in?
To protect customers from bad conduct
When did consumer duty become effective for new & existing products?
31st July 2023
When did consumer duty become effective for closed products or services?
31st July 2024
Who does consumer duty apply to?
Product & services offered to retail customers
What principles no longer apply when principle 12 customer duty is in force?
Principle 6 (Customer’s Interest)
Principle 7 (Communications with clients)
What are the four outcomes has the FCA has identified for customer needs of firm-consumer relationship?
- Products & Services
- Price & Value
- Consumer Understanding
- Consumer Support
Which element for the key elements of the firm-consumer relationship is this?
Designed to meet customer needs & sold to customers who meet those needs
Products & Services
Which element for the key elements of the firm-consumer relationship is this?
Product & Services must represent fair value for customers
Price & Value
Which element for the key elements of the firm-consumer relationship is this?
Consumers must be given information they require to make effective, timely & proper informed decisions on products & services
Consumer Understanding
Which element for the key elements of the firm-consumer relationship is this?
Customers must be enabled to realise benefits of products & services without hinderence through support
Consumer Support
All the below are what?
- Act in good faith
- Avoid causing foreseeable harm
- Enable & support retail customers to pursue their financial objectives
Three cross-cutting rules
What does the Treating Customers Fairly (TCF) mean for a firm dealing with customers?
That a firm must pay due regard to the interest of it’s customers & treat them fairly
What are the below in relation to the types of behaviours it wishes to see in relation to customer fairness.
- Considering specific target markets when developing products
- Ensuing that communications are clear and do not mislead
- Honouring promises & commitments that have been made
- Identifying & eradicating root cause of complaints
Areas that a firm should consider when demonstrating fairness to customers
What is the purpose of clarity of sales?
- Ensure that advice given to customers is clear, fair and not misleading
- Advice to be given must high quality to avoid mis-selling
What are the below in regards to customers?
- Customers can be confident the firm they are dealing with is commited to fair treatment
- Products are designed to meet the needs of properly identified customers groups
- Customers are provided with clear instructions at all stages of a sale
- Any advice given is suitable for the customer
- Products perform as customers have been led to expect
- No unreasonable barriers to switching a product or making a complaint
6 outcomes to ensure fair treatment of customers
What is Management Information (MI)?
Data or statistics that are used to measure business performance or make necessary changes
What are the two types of Market Abuse?
- Insider Dealing
- Market Manipulation
What is insider Dealing?
Where an investor has information not available to other investors and takes advantage of this for personal gain
What is Market Manipulation?
Where a person knowingly gives out false information to influence a share price for personal gain
What is Whistleblowing?
Where a employee wishes to report serious or inappropriate circumstances within the firm they work for.
What is the Public Internet Disclosure Act in relation to Whistleblowing?
It enables a person to protection if they wish to report their firm
