FCA Authorization and Permissions Flashcards
6 cards from real FCA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 FCA Authorization and Permissions flashcards as text
What is the significance of the FCA's 'Consumer Duty' in relation to firm authorization?
Answer: Authorized firms must deliver good outcomes for retail customers as a condition of maintaining their permission
The Consumer Duty requires authorized firms to act to deliver good outcomes for retail customers across four outcome areas, and failure can result in supervisory or enforcement action.
What is a 'Change in Control' notification in the context of FCA authorization?
Answer: A mandatory notification when a person acquires or increases a qualifying holding in an authorized firm
Under Part XII of FSMA, anyone proposing to acquire or increase a qualifying holding (typically 10% or more) in an authorized firm must notify the FCA in advance and receive approval.
What does the FCA's 'Connect' system primarily serve?
Answer: The online portal used by firms to submit authorization applications and regulatory notifications
FCA Connect is the online portal through which firms submit new authorization applications, variations of permission, approved persons applications, and other regulatory notifications.
Which category of person requires 'Approved Person' status from the FCA to perform a Significant Influence Function?
Answer: Senior managers and directors performing controlled functions at authorized firms
Under the Senior Managers and Certification Regime (SM&CR), individuals performing Senior Management Functions must be pre-approved by the FCA, requiring a formal Approved Person assessment.
What happens to a firm's FCA authorization if it fails to satisfy the Threshold Conditions after initial authorization?
Answer: The FCA may cancel or vary the firm's permissions to bring it back into compliance
The FCA has ongoing powers under FSMA to vary or cancel a firm's permissions if it no longer meets the Threshold Conditions, following a statutory process including warning and decision notices.
What is the Regulatory Sandbox operated by the FCA?
Answer: A program allowing innovative firms to test new products and services with real consumers under relaxed regulatory conditions
The FCA's Regulatory Sandbox lets firms test innovative financial products and services in a controlled environment with real consumers, with certain regulatory rules relaxed or modified during the testing phase.