Conduct Risk

Question 1

What is the definition of conduct risk?

Answer 1

Any risk to fair customer outcomes or market integrity. Can be linked to a financial institution or individual that leads to customer detriment or has an adverse impact on market stability or competition.

Question 2

What are the key drivers of conduct risk?

Answer 2

1. Nature of relationship with client.
2. Types of product and services offered.
3. Customer profile - experience, knowledge and objectives.

Question 3

What are the PRA individual conduct rules?

Answer 3

1. Integrity
2. Due skill, care and diligence.
3. Open and cooperative with PRA, FCA and other regulators.

Question 4

What are the PRA Senior Manager conduct rules?

Answer 4

SC1. Business is controlled effectively.

SC2. Business complies with standards of the regulatory system.

SC3. Delegation of responsibilities is to an appropriate person and that you oversee the discharge of delegated responsibilities effectively.

SC4. You disclose appropriately any information of which the FCA and PRA would reasonably expect notice of.