CeMAP Module 1 key terms

The UK statute that established the single financial regulator, set out its statutory objectives and powers, and provides the legal framework under which firms are authorised and supervised.

The UK's central bank, responsible for monetary policy, issuing currency and safeguarding financial stability, and the parent body of the committees that oversee prudential regulation.

An approach in which the regulator directs more scrutiny and resources towards the firms and activities posing the greatest threat to its objectives, rather than treating every firm identically.

A supervisory style that relies on broad, outcome-focused requirements rather than detailed prescriptive rules, leaving firms to judge how best to meet the standard in their own business.

A Bank of England committee that identifies and addresses risks to the financial system as a whole, using macroprudential tools such as counter-cyclical capital buffers rather than firm-by-firm supervision.

The Bank of England's prudential regulator, supervising banks, insurers and large investment firms with a focus on their safety and soundness and on the stability of the financial system.

The UK conduct regulator, responsible for protecting consumers, protecting and enhancing market integrity and promoting competition, and for authorising and supervising the conduct of the firms it regulates.

The three statutory aims supporting the FCA's strategic objective: securing an appropriate degree of protection for consumers, protecting and enhancing market integrity, and promoting effective competition in consumers' interests.

The body of rules, guidance and standards the FCA applies to authorised firms, organised into sourcebooks such as COBS, ICOBS and SYSC, alongside the Principles and the Conduct Rules.

High-level, enduring obligations owed by every authorised firm, covering matters such as integrity, skill and care, market conduct, communications with clients, conflicts of interest and relations with regulators.

An activity specified in the Regulated Activities Order and carried on by way of business in relation to a specified investment; performing one without authorisation or exemption is a criminal offence.

An asset or right listed in the Regulated Activities Order, such as shares, bonds, insurance contracts, mortgages or units in a collective scheme, which brings related activity within the scope of regulation.

The authorisation granted by the FCA or PRA under FSMA, permitting a firm to carry on stated regulated activities and defining the scope and any limits of what it may do.

A firm or person that carries on regulated business on behalf of an authorised principal under a contractual arrangement, with the principal bearing regulatory responsibility for that activity.

The minimum standards a firm must meet, and continue to meet, to be authorised, including appropriate resources, suitability, and a business model compatible with the regulator's objectives.

Any communication that invites or induces a person to engage in investment activity; it must be fair, clear and not misleading and is normally made or approved by an authorised firm.

A regime in which senior managers hold mapped, approved responsibilities, other specified staff are certified annually as fit and proper, and all staff are bound by enforceable conduct rules.

A defined senior role under the SM&CR for which the holder must be approved by the regulator and accepts explicit, personal accountability for the area of the business they lead.

Any oral or written expression of dissatisfaction, whether justified or not, about a firm's provision of, or failure to provide, a financial service, alleging financial loss, material distress or inconvenience.

The independent statutory dispute-resolution scheme that investigates complaints a firm has not resolved, reaching decisions informally and free of charge to the consumer, and able to award compensation.

The maximum sum the Financial Ombudsman Service may require a firm to pay when a complaint is upheld, set by the regulator, reviewed periodically and applied to each complaint.

The deadline by which a firm must send a final response to a complaint, after which the consumer may refer the matter to the Ombudsman even if it remains unresolved.

The statutory compensation scheme of last resort, which pays eligible consumers up to set limits when an authorised firm is unable to meet claims made against it.

The process of disguising the criminal origin of money through placement, layering and integration, so that the funds appear to have come from a legitimate source.

The Act creating the principal UK money-laundering offences, including concealing, arranging and acquiring criminal property, together with the obligation to report suspicions of it.

Regulations requiring firms in the regulated sector to assess risk, identify and verify customers, retain records, appoint a nominated officer and train staff on their obligations.

The steps a firm takes to identify a customer, verify that identity from reliable independent sources, and understand the purpose and intended nature of the business relationship.

Additional, more intrusive checks applied where money-laundering risk is higher, for example with politically exposed persons, complex ownership structures or customers connected to high-risk jurisdictions.

Someone entrusted with a prominent public function, together with their known family members and close associates, whose position creates a higher risk of bribery or corruption requiring enhanced scrutiny.

A disclosure sent by a firm, through its nominated officer, to the National Crime Agency setting out knowledge or suspicion that a person is involved in money laundering or terrorist financing.

The individual inside a firm who receives internal reports of suspicion, considers them and decides whether a suspicious activity report should be passed to the National Crime Agency.

An offence committed where a person reveals that a suspicious activity report has been made, or that an investigation is under way, in a way likely to prejudice that investigation.

The data protection regime, read together with the Data Protection Act 2018, governing how personal data must be handled: lawfully, fairly and transparently, and only for specified, legitimate purposes.

A request from an individual to see the personal data a firm holds about them and related information, which must normally be answered free of charge within one month.

Individual-level rules in the FCA Handbook requiring staff to act with integrity, with due skill, care and diligence, to treat customers fairly and to deal openly and co-operatively with regulators.

An outcomes-based principle requiring firms to deliver six defined consumer outcomes, from clear product design through suitable advice to no unreasonable post-sale barriers.

A rule requiring firms to act to deliver good outcomes for retail customers, built around four areas: products and services, price and value, consumer understanding, and consumer support.

A customer whose circumstances, such as poor health, low financial resilience, a significant life event or low capability, make them susceptible to harm, so extra care is needed.

Situations where a firm's own interests, or those of an employee or another client, could improperly influence the advice or service given, requiring identification and management, or disclosure where management is insufficient.