FCA Regulatory Framework Flashcards

What is the FCA's approach to enforcement?

Answer: It uses a credible deterrence strategy combining enforcement with supervision

The FCA uses a credible deterrence strategy, combining proactive enforcement action with ongoing supervision to deter misconduct and protect consumers and market integrity.

What is a 'waiver' in the context of FCA regulation?

Answer: A direction modifying or dispensing with a rule in specific circumstances for a specific firm

The FCA can grant waivers that modify or dispense with specific rules for individual firms where certain conditions are met, such as the waiver not adversely affecting consumer protection.

What is the significance of 'Principle 11' under the FCA's Principles for Businesses?

Answer: Firms must deal with regulators in an open, cooperative way and disclose appropriately

Principle 11 requires firms to deal with the FCA and other regulators openly and cooperatively and to disclose to the FCA anything of which it would reasonably expect notice.

What powers does the FCA have over unregulated activities?

Answer: The FCA can take action against misleading financial promotions and illegal activities even if unregulated

While the FCA primarily regulates authorised firms, it has powers to take action against unauthorised firms or individuals carrying on regulated activities without permission, and can act against misleading financial promotions.

What is the FCA's Financial Services Register used for by consumers?

Answer: To verify whether a firm or individual is authorised by the FCA

Consumers can use the Financial Services Register to check whether a firm or individual is authorised or registered by the FCA before using their services, helping to avoid scams and unauthorised firms.

What happens when a firm breaches an FCA Principle for Businesses?

Answer: The FCA can take disciplinary or enforcement action against the firm

Breaching a Principle for Business can result in the FCA taking disciplinary or enforcement action, which may include public censure, financial penalties, or restrictions on the firm's activities.