UK Financial Services Regulation Flashcards

What are the FCA's three operational objectives?

Answer: Consumer protection, market integrity, and promoting competition

The FCA's three operational objectives are securing appropriate consumer protection, protecting and enhancing market integrity, and promoting effective competition.

What is the role of the Financial Ombudsman Service (FOS) in mortgage complaints?

Answer: To resolve disputes between consumers and financial firms when the firm's internal complaints process has not achieved a satisfactory outcome

The FOS provides an independent dispute resolution service for consumers who remain dissatisfied after completing the firm's internal complaints procedure.

What is the Prudential Regulation Authority (PRA) and how does it relate to mortgage lenders?

Answer: It is responsible for the prudential supervision of banks, building societies, and insurers to promote financial stability

The PRA, part of the Bank of England, supervises banks, building societies, and large insurers to ensure they are financially sound — this includes major mortgage lenders.

What is the Senior Managers and Certification Regime (SM&CR) and how does it affect mortgage firms?

Answer: It holds senior individuals in financial firms personally accountable for their responsibilities and requires firms to certify the fitness of certain employees

SM&CR makes senior managers personally accountable for their areas of responsibility and requires firms to assess and certify the fitness and propriety of key staff.

What is the purpose of the Financial Services Compensation Scheme (FSCS) in relation to mortgages?

Answer: It provides compensation if a regulated firm fails and cannot meet claims for bad advice, including mortgage mis-selling

FSCS is the UK's statutory compensation scheme — it can pay compensation if an authorised firm goes bust and owes money due to mis-selling or bad advice, including mortgage advice.

What are the FCA's requirements for mortgage advisers regarding Continuing Professional Development (CPD)?

Answer: Advisers must complete a minimum of 35 hours of CPD per year, of which at least 21 must be structured

The FCA requires mortgage advisers to maintain competence through at least 35 hours of CPD annually, with a minimum of 21 hours being structured learning.