The following amendments have been made to the edition 22 workbook.
The following section has been added to following Section 3.2 to read:
3.3 PRA Fundamental Rules
In June 2014 the PRA published its Fundamental Rules, which replaced the Principles for Businesses. The Rules are high-level and collectively set out the PRA’s expectations of firms and act as an expression of the PRA’s general objective of promoting the safety and soundness of regulated firms. They are a clearer expression of the PRA’s expectations and more closely reflect the PRA’s underlying detailed rules than the Principles.
The Rules apply proportionately to all PRA firms, taking into account the difference between sectors and between sizes of firms. They apply with respect of activities wherever they are carried on.
The Fundamental Rules are:
- A firm must conduct its business with integrity.
- A firm must conduct its business with due skill, care and diligence.
- A firm must act in a prudent manner.
- A firm must at all times maintain adequate financial resources.
- A firm must have effective risk strategies and risk management systems.
- A firm must organise and control its affairs responsibly and effectively.
- A firm must deal with its regulators in an open and cooperative way and must disclose to the PRA appropriately anything relating to the firm of which the PRA would reasonably expect notice.
- A firm must prepare for resolution so, if the need arises, it can be resolved in an orderly manner with a minimum disruption of critical services.
Section 6 – The Relationship Between the FCA and the PRA and Various Other Bodies
Learning Objective 1.2.2 – the Competition Commission has been replaced with the Competition and Markets Authority
Section 6.3 - The UK Competition Commission (CC)
This section has been replaced with the following wording:
6.3 Competition and Markets Authority (CMA)
The Competition and Markets Authority (CMA) took over the role and functions previously carried out by the Competition Commission and the Office of Fair Trading.
The CMA came into being on 1 April 2014. It works to promote competition for the benefit of consumers – both within and outside of the UK. Its main aim is to make markets work well for consumers, businesses and the economy. It is not solely looking into competition within the financial services industry.
The CMA has five strategic goals:
- To deliver effective enforcement to deter wrongdoing, protect consumers and educate businesses.
- To extend competition frontiers by using the markets regime to improve the way competition works, in particular within the regulated sectors.
- To refocus consumer protection, working with its partners to promote compliance and understanding of the law, and empowering consumers to make informed choices.
- To achieve professional excellence by managing every case efficiently, transparently and fairly, and to ensure all legal, economic and financial analysis is conducted to the highest international standards.
- To develop integrated performance through ensuring that all staff are brought together from different professional backgrounds to form effective multi-disciplinary teams and to provide a trusted competition adviser across government.
The CMA is responsible for:
- Investigating mergers which could restrict competition.
- Conducting market studies and investigations in markets where there may be competition and consumer problems.
- Investigating where there may be breaches of UK or EU prohibitions against anti-competitive agreements and abuses of dominant positions.
- Bringing criminal proceedings against individuals who commit the cartel offence.
- Enforcing consumer protection legislation to tackle practices and market conditions that make it difficult for consumers to exercise choice.
- Co-operating with sector regulators and encouraging them to use their competition powers.
- Considering regulatory references and appeals.
Section 6.2.1 - The Principles and Rules on Conflicts of Interest
Example of a Chinese Wall in Operation
Section 150 FSMA has been amended to read Section 138D