FCA FCA Authorization and Permissions 1

Question 1

Under the Financial Services and Markets Act 2000 (FSMA), what is the general prohibition?

Accepted Answer

No firm may carry on a regulated activity in the UK unless authorized or exempt

Answer

Section 19 FSMA establishes the general prohibition, making it a criminal offense to carry on a regulated activity without FCA authorization or an applicable exemption.

Question 2

What is a 'Scope of Permission' (also called a 'Part 4A permission') in FCA authorization?

Accepted Answer

A document listing the regulated activities a firm is authorized to carry on

Answer

A Part 4A permission specifies exactly which regulated activities and investment types a firm is permitted to undertake, forming the legal boundary of its authorization.

Question 3

Which term describes a firm that distributes products on behalf of an FCA-authorized firm and takes responsibility under that firm's authorization?

Accepted Answer

Appointed Representative (AR)

Answer

An Appointed Representative is a firm or individual that conducts regulated activities under the umbrella of a principal firm's FCA authorization, with the principal taking regulatory responsibility.

Question 4

What does 'passporting' allow under UK financial services regulation post-Brexit?

Accepted Answer

Passporting was an EU mechanism that no longer applies in the UK after Brexit

Answer

Passporting was an EU single-market right allowing EEA-authorized firms to operate across member states; it ceased to apply to the UK upon Brexit, replaced by the Temporary Permissions Regime and other arrangements.

Question 5

Which FCA application process must a firm use when it wants to add a new regulated activity to its existing permissions?

Accepted Answer

Variation of Permission (VoP)

Answer

A Variation of Permission application is used when an already-authorized firm wants to add, remove, or change the scope of its regulated activities or investment types.

FCA - Financial Conduct Authority Practice Test

FCA - Financial Conduct Authority Practice Test

FCA FCA Authorization and Permissions 1