FCA Regulatory Framework Flashcards

What is the purpose of the FCA's Conduct of Business Sourcebook (COBS)?

Answer: To regulate the conduct of firms providing financial services to clients

COBS sets out the detailed conduct of business requirements that firms must follow when providing financial services, including rules on communications, suitability, and disclosure.

What does 'passporting' refer to in the context of UK financial regulation post-Brexit?

Answer: The former right of EEA firms to operate in the UK using their home state authorisation

Passporting was the mechanism by which EEA firms could operate in the UK (and vice versa) under their home state authorisation. This ended with Brexit, replaced by the Temporary Permissions Regime and new overseas frameworks.

What is an 'Appointed Representative' in FCA terms?

Answer: A firm or person that carries on regulated activities under the responsibility of an authorised firm

An Appointed Representative (AR) is a firm or individual that conducts regulated activities on behalf of, and under the responsibility of, an FCA-authorised principal firm.

What is the Temporary Permissions Regime (TPR)?

Answer: A post-Brexit regime allowing EEA firms to continue operating in the UK temporarily

The TPR was established after Brexit to allow EEA firms that previously passported into the UK to continue operating while they applied for full UK authorisation.

Under FCA rules, what is a 'regulated activity'?

Answer: An activity specified in the Regulated Activities Order that requires FCA authorisation

A regulated activity is one listed in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO). Carrying on such activities by way of business in the UK requires FCA authorisation.

What is the role of the Financial Policy Committee (FPC)?

Answer: To identify, monitor and take action to remove or reduce systemic risks to the UK financial system

The FPC, part of the Bank of England, is responsible for macroprudential regulation — identifying and addressing systemic risks that could threaten the stability of the UK financial system.