558455
Description
Mind Map by d_mills_23, updated more than 1 year ago
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Created by d_mills_23
almost 11 years ago
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FCA's RESPONSIBILITIES AND
APPROACH TO REGULATION
- FCA's objectives
- Strategic - Ensure relevant markets function well
- Operational
- secure and appropriate degree of
protection
- protect and enhance the integrity of UK
financial system
- promote effective competition in interest of
consumers
- secure and appropriate degree of
protection
- Strategic - Ensure relevant markets function well
- Approach
- Employ a risk-based approach
- act in a proactive rattan than reactive manner
- main characteristics
- Encourage firms to adopt the FSA's "Treating customers fairly"
- firms are categorised in risk they pose to FCA - scale of C1 (large banks) to C4 (IFA's)
- focuses on addressing risk issues as (or before) they emerge
- Proactive in assessing product suitability and risk
- FCA is able to review and react to super complaints (complaint made by a consumer body such as Which?)
- FCA takes an intervention stance and has lower tolerance to potential damage to consumer
- Intervention
- evidence that these markets are not
operating in the interest of retail consumers
- risk of product outweighs the benefit of the product
- sales and marketing process of a product are to
the detriment of the consumer
- evidence that these markets are not
operating in the interest of retail consumers
- Intervention
- FCA has power to make appropriate disciplinary actions available to public
- Encourage firms to adopt the FSA's "Treating customers fairly"
- Employ a risk-based approach
- Supervision
- Firm systematic framework
- structured conduct assessment of firms
- structured conduct assessment of firms
- Event driven work
- FCA alllocate supervisory resources for events that
happen outside of the normal assessment cycle
- FCA alllocate supervisory resources for events that
happen outside of the normal assessment cycle
- Issues and products
- assessment of conduct risks across a
sector of the industry
- assessment of conduct risks across a
sector of the industry
- Firm systematic framework
- Prudential regulation to firms
- CP1 - firms where a disorderly failure will have a
significant impact on the market they operate in
- CP2 - failure would have a significant impact on
the functioning of the market they operate in
- CP3 - a failure would have no impact on the market
- CP1 - firms where a disorderly failure will have a
significant impact on the market they operate in
- Financial Crime
- Fraud
- Money Laundering
- Bribery and corruption
- Fraud
- FCA handbook
- Principles of Business
- Integrity
- Skill, care and diligence
- Management and control
- Financial prudence (adequate financial resources)
- Market Conduct
- Customers interests
- Communication with clients
- Customer's relationship of trust
- Clients assets
- Relations with regulators
- Integrity
- Controlled functions
- Governing - those who run biz
- Required functions - roles that are required by FCA
regulations i.e. compliance oversight, money
laundering
- Systems - heads of finance, risk
assessment and internal audit
- Significant management functions - senior
managers of designated investment business,
insurance underwriting etc...
- Customer functions - giving advice, general
insurance and mortgages are not included
- approved people are those who
carry out controlled functions
- Governing - those who run biz
- Principles of Business
- Enforcement powers
- Variation of a firms permissions,
can remove a regulated activity
- Withdrawal of approval
- Injunction - prevents the person
from benefiting from the action
- Restitution - if a person benefited from the
contravention of a regulation they can be
asked to pay back profits
- Redress - if customer has made a loss - FCA can obtain a
court order requing loses to be made good
- Disciplinary action - 1 private warning 2
publish statement of misconduct 3
financial penalty
- Variation of a firms permissions,
can remove a regulated activity
- Systems and control
- Clear chain of responsibility
- Whistle-blowing - must have procedures
for employees to report inappropriate
behaviour
- Clear chain of responsibility
- Threshold conditions - if you
are regulated you must meet
certain conditions - e.e. legal
status, adequate resources
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