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
Under the Financial Services and Markets Act 2000 (FSMA), what is the general prohibition?
Answer: No firm may carry on a regulated activity in the UK unless authorized or exempt
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.
What is a 'Scope of Permission' (also called a 'Part 4A permission') in FCA authorization?
Answer: A document listing the regulated activities a firm is authorized to carry on
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.
Which term describes a firm that distributes products on behalf of an FCA-authorized firm and takes responsibility under that firm's authorization?
Answer: Appointed Representative (AR)
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.
What does 'passporting' allow under UK financial services regulation post-Brexit?
Answer: Passporting was an EU mechanism that no longer applies in the UK after Brexit
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.
Which FCA application process must a firm use when it wants to add a new regulated activity to its existing permissions?
Answer: Variation of Permission (VoP)
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.
What is the FCA's primary consideration when assessing a firm's authorization application under the 'Threshold Conditions'?
Answer: Whether the firm is fit and proper, financially sound, and has adequate resources and systems
The Threshold Conditions in Schedule 6 of FSMA set minimum standards covering suitability, financial resources, effective supervision, and business organization that firms must meet to gain and retain authorization.