Styperson POPE

Strategy & Compliance for Investment Firms

FSA Principles for Businesses & Approved Persons

This isn’t a particularly original or insightful page because it’s basically just a cut and paste from the FSA’s handbook but the principles are very imoprtant to the FSA and they should be to all authorised firms as well.  They bear repeating:

FOR BUSINESSES…

1 Integrity – A firm must conduct its business with integrity.

2 Skill, care and diligence – A firm must conduct its business with due skill, care and diligence.

3 Management and control – A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.

4 Financial prudence – A firm must maintain adequate financial resources.

5 Market conduct – A firm must observe proper standards of market conduct.

6 Customers’ interests – A firm must pay due regard to the interests of its customers and treat them fairly.

7 Communications with clients – A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading.

8 Conflicts of interest – A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.

9 Customers: relationships of trust – A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment.

10 Clients’ assets – A firm must arrange adequate protection for clients’ assets when it is responsible for them.

11 Relations with regulators – A firm must deal with its regulators in an open and cooperative way, and must disclose to the FSA appropriately anything relating to the firm of which the FSA would reasonably expect notice.

FOR APPROVED PERSONS…

  1. An approved person must act with integrity in carrying out his controlled function.
  2. An approved person must act with due skill, care and diligence in carrying out his controlled function.
  3. An approved person must observe proper standards of market conduct in carrying out his controlled function.
  4. An approved person must deal with the FSA and with other regulators in an open and cooperative way and must disclose appropriately any information of which the FSA would reasonably expect notice.
  5. An approved person performing a significant influence function must take reasonable steps to ensure that the business of the firm for which he is responsible in his controlled function is organised so that it can be controlled effectively. 
  6. An approved person performing a significant influence function must exercise due skill, care and diligence in managing the business of the firm for which he is responsible in his controlled function.
  7. An approved person performing a significant influence function must take reasonable steps to ensure that the business of the firm for which he is responsible in his controlled function complies with the relevant requirements and standards of the regulatory system. 

(For 5-7 above, a “significant influence function”, includes Directors, Compliance Officers, and Money Laundering Reporting Officers, but not people in only a customer function.)

If you would like help in determining how these principles can be applied in practice, within your business, please do call or e-mail Simon Webber, StypersonPOPE’s MD.

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