Financial Conduct Authority—Principles for Businesses (PRIN)

The Principles · Principle 2: Skill, care and diligence—a firm must conduct its business with due skill, care and diligence · Principle 3: Management and control— ... Skiptomaincontent Signin Contactus LegalGuidanceLegalGuidance PracticeArea ArbitrationBanking&FinanceCommercialCompetitionConstructionCorporateCorporateCrimeDisputeResolutionEmploymentEnergyEnvironmentEULawFamilyFinancialServicesImmigrationInformationLawIn-houseAdvisorInsurance&ReinsuranceInternationalTradeIPLifeSciencesLocalGovernmentPensionsPI&ClinicalNegligencePlanningPracticeCompliancePracticeManagementPrivateClientPropertyPropertyDisputesPublicLawRestructuring&InsolvencyRisk&ComplianceShareIncentivesTaxTMT Topic Authorisation,approvalandsupervisionBanksandmutualsComplaints,compensationandclaimsmanagementConductrequirementsConsumercredit,mortgageandhomefinanceConsumerprotectionCrowdfundingplatformsDisputeresolutionforfinancialserviceslawyersFinancialcrimeandsanctionsFinancialServicesregulation—gettingstartedFinancialservicesweeklyhighlightsFintechandcryptoassetsFSMAregulatedpensionsactivityInternational—financialservicesandrelatedsectorsInvestigations,enforcementanddisciplineInvestmentfundsandassetmanagementIslamicfinanceKeydevelopmentsandhorizonscanningMarketsandtradingOperationalresiliencePackagedRetailandInsurance-basedInvestmentProducts(PRIIPs)PaymentservicesandsystemsPrudentialrequirementsQ&AsRegulatedactivitiesRegulationofbenchmarksandIBORreformRegulationofcapitalmarketsRegulationofderivativesRegulationofinsuranceRiskmanagementandcontrolsSecuritiesfinancingtransactionsSustainablefinanceandESGUK,EUandinternationalregulatorsandbodies SubTopic InformationandcybersecurityforfinancialservicesfirmsRemunerationSystemsandcontrols Sign-in HelppoweredbyLexisPSL FinancialConductAuthority—PrinciplesforBusinesses(PRIN) FinancialConductAuthority—PrinciplesforBusinesses(PRIN) Practicenotes ThefollowingFinancialServicespracticenoteprovidescomprehensiveanduptodatelegalinformationcovering: FinancialConductAuthority—PrinciplesforBusinesses(PRIN) ThePrinciples Purpose ClientsandthePrinciples Clientcategorisation Classificationofclientsaseligiblecounterparties Effectofclassifyingclientsaseligiblecounterparties Application Whichfirms? Whichactivities? More... Territorialapplication? ThePrinciplesandMiFIDbusiness BreachofthePrinciples Conclusions Less... FinancialConductAuthority—PrinciplesforBusinesses(PRIN)ThisPracticeNoteexplainsthePrinciplesforBusinesses(PRIN)setdownbytheFinancialConductAuthority(FCA).ThePrinciplesformpartoftheFCA’sHighLevelStandardssetoutintheFCAHandbook.ThePrinciplesareageneralstatementofthefundamentalobligationsoffirmsandtheotherpersonstowhomtheyapplyundertheregulatorysystem.The PrudentialRegulationAuthority(PRA)hasequivalenthighlevelstandardswhicharefoundintheFundamentalRulescontainedinitsRulebook.SubstantialdifferencesbetweenPRINandthePRA'sFundamentalRulesmeanthatdual-regulatedfirmswillneedtokeepthosedifferencesinmindwhenconsideringhowtheycomplywiththeirconductandprudentialrequirements.Inparticular,thePRA'sFundamentalRulesincludearequirementforfirmstoprepareforresolutionso,iftheneedarises,theycanberesolvedinanorderlymannerwithaminimumdisruptionofcriticalservices.FormoreinformationonthePRA'sFundamentalRules,seePracticeNote:PrudentialRegulationAuthority—FundamentalRules.IfafirmbreachesoneormoreofthePrinciples,itcanfaceenforcementactionwhichcould,forexample,resultinitsauthorisationbeingremoved.ItisvitalthatallfirmsareawareofthePrinciplesandensuretheyimplementthemandcontinuallyensurethattherequiredstandardsaremaintained.ThePrinciplesThePrinciplesare:•Principle1:Integrity—afirmmustconductits × Tryitfreefor7days** FreetrialsareonlyavailabletoindividualsbasedintheUK AccessthiscontentforfreewithatrialofLexisPSLandbenefitfrom: Instantclarificationonpointsoflaw Smartsearch Workflowtools 36practiceareas Back Step1of2Basicinformation Step1 Step2 Name Name Title* Mr. Ms. Miss Mrs. Dr. Prof. Name Clicktoedit Name NoContent Thesefieldsarerequired Email Email Emailid Clicktoedit Email NoContent Thisfieldisrequired. 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TAKEAFREETRIAL Relateddocuments: Practicenotes7 ConductRulesforSM&CRFirms Corporategovernanceforprivatecompanies Directors’remunerationreport Directors’remuneration—institutionalinvestorguidelines Non-executivedirectors(NEDs)andeffectivecorporategovernance—expectationsoftheFinancialConductAuthority(FCA) Non-executivedirectors—independence Politicaldonations Precedents1 Letter—non-executivedirectorappointment Home/FinancialServices /Riskmanagementandcontrols /Systemsandcontrols Populardocuments Defectsliabilityperiodandrectificationofdefects DefectsliabilityperiodandrectificationofdefectsItiscommoninconstructionprojectsfordefectstomanifestorappearintheworks.Mostconstructioncontractsrequirethecontractortoreturntositetorectify(alsoknownas‘makegood’)defectswhichariseorarediscoveredduringa Commonfinancialcovenants CommonfinancialcovenantsThisPracticeNoteexplainscertaincommonfinancialcovenantsusedincommercialfinancetransactionsincluding:•minimumnetworthtest•gearingratio•leverageratio(ordebttoequityratio)•currentratio(oracidtestratio)•cashflowratio•interestcoverratio,and•loan Whatisapublicauthority? 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