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Questions and Answers
Which conduct rule requires individuals to pay due regard to the interests of customers and treat them fairly?
Which conduct rule reflects the new, higher standard of the Consumer Duty?
What is the responsibility of the head of a business area dealing with retail customers according to the text?
Which of the following is an example of misusing a client's assets?
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Which of the following is a responsibility of a manager in relation to understanding the risks of a business?
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What should a manager do if they are not an expert in a particular business area?
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According to Rule 6, which of the following statements is true?
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How does the Consumer Duty relate to Rule 6?
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Under Rule 4, which of the following actions would be considered a breach of providing adequate control over a client's assets?
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Which of the following actions would be considered a breach of Rule 5 of the Consumer Duty?
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Study Notes
Individual Conduct Rules in the Financial Services Industry
- The FCA Handbook provides examples of activities that would breach the Conduct Rules.
- Rule 1 requires acting with integrity, and examples of breaches include misleading clients, falsifying documents, and providing false information to the firm or the FCA.
- Rule 1 also covers acts like misusing client assets, front running client orders, and designing transactions to disguise breaches.
- Rule 2 requires acting with due skill, care, and diligence, particularly in activities that may affect customers or the financial system.
- Examples of breaches of Rule 2 include failing to disclose risks to customers, recommending unsuitable investments, and undertaking transactions without understanding the risks.
- Managers are expected to understand the risks of the business they are responsible for and take steps to control and monitor those risks.
- Managers should investigate and seek independent opinions when dealing with complex business areas they are not experts in.
- Directors are expected to fulfill their duties when participating in board activities, including meetings and reporting.
- Rule 3 requires being open and cooperative with the FCA and other regulators.
- Regulators with recognized jurisdiction and the power to call for information are included in Rule 3.
- There is no duty to report information directly to regulators unless responsible for reporting, but obstructing the reporting of information is viewed negatively.
- The Conduct Rules aim to ensure integrity, skill, and cooperation within the financial services industry.
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Description
Explore the individual conduct rules outlined in the FCA Handbook for the financial services industry. Learn about acting with integrity, due skill, care, and diligence, and being open and cooperative with regulators.
