Supervisory approaches and FCA Handbook

Question 1

Risk based approach to supervision - FCA

Answer 1

Three pillar approach

1) Proactive - Interest of clients , integrity of market
2) Reactive - dealing quickly
3) Issues and Product supervision - SRA (sector risk assessment )

Question 2

Risk based approach to supervision- PRA

Answer 2

Promote safety and soundness of firms

Avoid adverse effects on financial stability

Minimise adverse effects from failure of firms

More forward looking supervision

Question 3

FCA three types of guidance

Answer 3

1) Safe Harbour - in FCA handbook
e. g. FCA guidance

2) Sturdy Breakwater - prevents FCA taking action
e. g. JMLSG

3) Implicit recognition
e. g. banking code

Question 4

FCA main objective

Answer 4

Put consumers at the heart of their business

Question 5

Fixed Portfolio Firm

Answer 5

Among largest supervised by FCA

Having significant presence

Dedicated team of supervisors

Question 6

Flexible Portfolio Firm

Answer 6

Supervised sector based approach

Majority of firms are flexible

Question 7

Which pillar not apply ??

Answer 7

Pillar 1 not apply for flexible portfolio firm