Overview of FCA Principles for Business - MyComplianceOffice

FCA Principles for Business and Why Are They Important? · Integrity · Skill, care and diligence · Management and control · Financial prudence ... Connectwithsales:1-866-981-1558 ContactUs UpcomingWebinars CustomerSupport SignIn Products KnowYourEmployee(KYE) PersonalTradingCompliance Gifts,EntertainmentandHospitality PoliticalContributionsandDonations OutsideBusinessActivities Authorization,Registrations,andLicensing RoleMonitoringandAssurance ComplianceProgramManagement ConnectedPersonsandRelationships KnowYourTransactions(KYT) TradeSurveillance DealandEngagementReview InsiderandMNPI Suitability KnowYourThirdParty(KYTP) ThirdPartyRisk ThirdPartyApprovals KnowYourRisk(KYR) Solutions EducationCenter Blog Webinars Resources AboutUs Awards Careers Company Partners SolutionsOverview Aeneanlaciniabibendumnullasedconsectetur.Morbileorisus,portaacconsecteturac,vestibulumateros.Praesentcommodocursusmagna,velscelerisq. ExploreSolutions ComplianceOversight Understandyourfirmriskprofile ESGCompliance MonitorESGrisks Anti-Bribery&Corruption Identifypotentialmisconduct SeniorManagers&Certifications MeettheregulatoryobligationsofSMCR ConductRisk Monitorconflictsofinterestandconductrisk ControlRoomCompliance Managedeal-relatedconflicts Pay-to-PlayCompliance Monitorpoliticalcontributionsanddonations ConflictsofInterest Helpmaintainingtheconductofthefirm CryptoCompliance Avoidcryptocurrencyconflictsofinterest SmallFirmCompliance Completesolutionforsmallfirms CorporateCompliance Addresstheneedsofregulatedorganizations OverviewofFCAPrinciplesforBusiness June24,2021 |ByLisaDeschamp | FinancialConductAuthority, SMCR, FCA, conductrisk, ESG      TheFinancialConductAuthority(FCA)istheconductregulatorfornearly60,000financialservicesfirmsandfinancialmarketsintheUK,andit'spartoftheFCA'sworktoimplement,superviseandenforceinternationalstandardsandregulationsintheUK.TheUKregulatorhascriminal,civilandregulatoryenforcementpowers. Inthisarticle,weexplaintheFCA's11PrinciplesforBusiness(PRIN),theirpurpose,howtheyareusedtoregulatethemarketintheUK,andtheconsequencesofbreachingthePrinciples. WhataretheFCAPrinciplesforBusiness(PRIN)? TheFCAHandbookstatesthatregulatedfirmsmustadheretotheir11principlesofbusiness,whicharefundamentalobligationsthatcontributetotheregulatorobjectivetorestoreandmaintainmarketintegrityandprotectconsumers. Overall,theFCAprinciplesforbusiness(PRIN)appliestoworldwideactivitiesthatcouldnegativelyaffecttheUKfinancialsystem.IfafirmbreachesthePrinciples,theFCAcanapplydisciplinaryactionssuchasremovethefirm'sauthorisationtooperate.Allauthorisedfirmsmustbeawareofthe11PRINtoensuretheyareimplementedandstandardsaremet. FCAPrinciplesforBusinessandWhyAreTheyImportant? TheFCAworkaroundthesePrinciples(PRIN2.1): Integrity Skill,careanddiligence Managementandcontrol Financialprudence Marketconduct Customers'interests Communicationswithclients Conflictsofinterest Customers:relationshipsoftrust Clients'assets Relationswithregulations RegulationofthesectorisveryimportantfortheeconomyandregulatorssuchastheFCAplaysacriticalroleinensuringthemarketoperatestosupporteconomicgrowth.TheUKfinancialservicesindustryemploysover2.2millionpeople,contribute£65.6billionintaxtotheUKeconomyandgenerates7.2%oftheUK'seconomicoutput,makingtheUKthehighestnetexporteroffinancialservices.ArecentreportrankedLondonthesecond-largestfinancialcentreintheworld(narrowlybehindNewYork). TheUKhandlesmoreforeignexchangethanthenextfourlargestcentrescombined. TheUKalsomanages70%ofthesecondarymarketturnoverininternationalbonds. Source:"Financialservices:contributiontotheUKeconomy." ThesestatssumuptheimportanceoftheFCAworkandtheimpactoftheirdecisionsontheeconomy.WhenafirmisregulatedbytheFCAandadherestotheUKPRIN,theyreducetheriskofbeingfinedandbenefittheirbusinessbyincreasingcustomers'trust.Firmsthatputtheircustomersatheartandprotectthemabovethefirms'profitorincomecanwinmorebusinessthrougharelationshipoftrustwiththeircustomersandgaintheFCA'strustaswell. ConsequencesofBreachingthePrinciples TheFCAHandbookcontainsthecompleterecordofFCArulesandregulations,andallfirmsmustcomplywiththedifferentareasofcomplianceinthedocument.TheFCAsuperviseshowfirmsworkandcanfine,prosecuteorstopthosethatdon'tmeettheconductstandardsfromcarryingoutregulatedactivities. TheHandbookexplainshowtheFCAdetermineswhethertherehasbeenafailuretocomplywiththerules.AccordingtotheHandbook,theFCAwillconsiderthefullcircumstancesofeachcasewhendecidingwhetherornottotakeactionforafinancialpenaltyorpubliccensure. Theconsequencescanvary.RecentlytheFCAcarriedoutdisciplinaryactionsonseniormanagersregardingbreachesofPrinciples2,3,and11andsaidthatseniormanagersfailedtoactwithdueskill,careanddiligenceover"washtrades"bynottakinganystepstoinvestigatethelegitimacyoftrades.Inthiscase,theFCAfinedTullettPrebon(Europe)Limited(TullettPrebon)£15.4million. InanotherrecentcaseandoneofthemostsignificantinvestigationsintheUK,theFCAfoundGoldmanSachsInternational(GSI)inbreachofPrinciples2and3.TheFCAthenfinedGSI£96.6millioninOctober2020. OurblogsonFCAexpectations,alertsandinvestigations: FCA'sExpectationsonFinancialResilience TheFCA'sCapabilitiestoDetectMarketAbuse FCAonPersonalAccountDealingCompliance SMCRintheContextofClimateChange TheFCAworkswithanetworkoforganisationstoraiseawarenessoftheirapproachtoregulationandcampaigntoclarifyrealandmeaningfulconsequencesforfirmsandindividualswhodon'tfollowtherules.Morerecently,theUKregulatorsaiditwouldupdateitsapproachtouseitswiderangeofenforcementpowerstoprotectthemarketandconsumersandtakeactionagainstfirmsandindividualswhodonotmeetthestandards. UsingTechnologytoAchieveCompliance MyComplianceOfficeautomatestheend-to-endmanagementofrequestprocesses,compliancemonitoringandexceptionmanagementassociatedwithconflictofinterestpolicies,helpingfirmsembedbestpracticesintheircomplianceprogramandmitigatetheriskofmisconduct. OurplatformcoversareasofcompliancethatarecrucialtocomplywiththeFCAPRIN,suchasPersonalAccountDealing,TradeSurveillance,Suitability,Licensing&Registrations,SMCR. MyComplianceOfficeallowsfirmstoaddressbothpersonalandtransactionalconflictsofinterest,identifyingconflictsacrossemployee,firmtransactionsandthirdparties.​AllproductsontheMyComplianceOfficeplatformareavailableasaSuiteofConductRiskSolutionsthatcanbepurchasedalacarteorascompletemodules​thatarelesscostlytobuyandinstall. RelatedArticles BlogPosts Supervision–Stormyseasonthehorizon? ReadMore BlogPosts SECDisclosuresGuide:SMARequirements ReadMore BlogPosts IncreasedComplianceCommitmentStartswithT.R.U.S.T ReadMore PrevPost NextPost Signupforournewsletter AboutMCO EUSignInUSSignIn Copyright2021MCOInc.AllRightsReserved|PrivacyPolicy Top