FCA Regulatory Framework Flashcards

What is the FCA Handbook?

Answer: The complete set of FCA rules and guidance for regulated firms

The FCA Handbook is the comprehensive collection of rules, guidance, and other provisions made by the FCA that regulated firms must follow.

Which FCA sourcebook contains the principles for businesses?

Answer: PRIN

PRIN (Principles for Businesses) contains the eleven fundamental Principles for Businesses that all FCA-authorised firms must observe.

How many Principles for Businesses does the FCA set out?

Answer: 12

Following the introduction of the Consumer Duty, the FCA now has 12 Principles for Businesses. The 12th principle (Consumer Duty) was added in 2023 and applies to firms dealing with retail customers.

What does the FCA's Senior Managers and Certification Regime (SM&CR) replace?

Answer: The Approved Persons Regime

The SM&CR replaced the Approved Persons Regime (APR) to improve individual accountability in financial services by making senior managers personally responsible for the areas they oversee.

Under the SM&CR, what is a 'Statement of Responsibilities'?

Answer: A document setting out what each senior manager is responsible and accountable for

A Statement of Responsibilities is a document that clearly sets out the areas of the firm's business for which a senior manager is responsible, ensuring clear lines of accountability.

Which of the following activities requires FCA authorisation?

Answer: Advising on investments as a regulated activity

Advising on investments is a regulated activity under FSMA 2000 and the Regulated Activities Order. Providing personal recommendations on specific investments requires FCA authorisation.