What are the FCA Fit & Proper Requirements and Conduct rules?

Following on from our previous article about the Senior Manager regime, we provide more detail about the FCA Fit & Proper Requirements and Conduct rules.

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FCA Fit & Proper Requirements

Fit & Proper Requirements are the criteria that financial firms and individuals working within the financial sector must meet in order to be authorised or registered by the Financial Conduct Authority (FCA) in the UK. These requirements are designed to ensure that only firms and individuals with the necessary skills, knowledge, and experience are allowed to operate within the financial sector.

The Fit & Proper Requirements cover a range of different areas, including:

• Financial soundness: Financial firms must have the financial resources and stability to be able to carry out their activities in a safe and responsible manner.
• Honesty and integrity: Financial firms and individuals must have a good reputation and be free from any criminal convictions or other sanctions that could call into question their honesty and integrity.
• Competence and capability: Financial firms and individuals must have the necessary skills, knowledge, and experience to be able to carry out their activities in a competent and professional manner.

Conduct Rules

Conduct Rules, on the other hand, are the rules and standards that financial firms and individuals must adhere to when carrying out their activities within the financial sector. These rules are designed to ensure that financial firms and individuals act with integrity, transparency, and fairness and that they put the interests of consumers first.The Conduct Rules cover a range of different areas, including:

• Treating customers fairly: Financial firms must always act in the best interests of their customers and must provide them with clear and accurate information about the products and services they offer.
• Maintaining market integrity: Financial firms must not engage in any activities that could undermine the integrity of the financial markets, such as insider trading or market manipulation.
• Managing conflicts of interest: Financial firms must take steps to avoid or manage any conflicts of interest that may arise in the course of their activities, in order to protect the interests of their customers.

Overall, both Fit & Proper Requirements and Conduct Rules are essential for ensuring that the financial sector in the UK operates in a fair, transparent, and responsible manner, and that consumers are protected from misconduct by financial firms.

Key steps you can take towards getting your applications approved by the FCA is to ensure you have conducted a thorough review of your SM&CR requirements.

About MEMA

Our specialist team has the experience and expertise to help you. Our offering includes a regulatory business plan, a suite of compliance policies and procedures, and an IT security risk assessment. We can provide template documents and work with you to tailor these to your specific circumstances. We can also carry out a gap analysis on your current policies and procedures – and help you address any action points identified.

We will explain to you the FCA’s expectations and its recent publications and prepare a gap analysis and/ or a suitable remediation plan. Among the firms, we work with are:

• Payment initiation service providers (PISPs)
• Account information service providers (AISPs)
• E-Money institutions
• FX exchange companies
• Merchant acquirers
• Bill payment service providers
• Electronic communication exclusion businesses

If you need any help or would like a complimentary chat to understand what your business may require contact MEMA at contact@memaconsultants.com.