CISI UK Financial Regulation key terms

The UK regulator responsible for protecting consumers, ensuring market integrity and promoting effective competition across conduct in retail and wholesale financial markets.

The Bank of England body that supervises the safety and soundness of banks, insurers and major investment firms, focusing on the harm a firm's failure could cause.

The arrangement under which a firm may be authorised and supervised by both the PRA for prudential matters and the FCA for conduct matters.

The legal goals Parliament sets for a regulator; for the FCA these include consumer protection, market integrity and competition, plus a strategic objective of ensuring markets work well.

The FCA objective requiring an appropriate degree of protection for consumers, taking account of the risk they take and their responsibility for their own decisions.

The minimum standards a firm must meet and continue to meet to be authorised, covering matters such as location of offices, business conduct and suitability.

Specified activities, such as dealing in investments or advising on them, carried out in relation to specified investments; performing them by way of business generally requires authorisation.

The categories of investment listed in the Regulated Activities Order, including shares, bonds, units in collective investment schemes, options and futures.

The formal permission granted to a firm allowing it to carry on specified regulated activities in the UK, subject to any limitations or requirements imposed.

A firm that holds permission under the Financial Services and Markets Act to carry on one or more regulated activities in the UK.

An individual approved by the regulator to perform a designated senior management or certification function within an authorised firm.

The framework replacing approved persons for most firms, imposing clear senior responsibilities, conduct rules and annual fitness certification of key staff.

An approved individual holding a prescribed senior management function with explicit, documented responsibility for a part of the firm's affairs.

The test applied to individuals and firms assessing honesty, competence, financial soundness and reputation before and during authorisation or approval.

The standards of behaviour applied to staff under the SM&CR, requiring integrity, due skill and care, cooperation with regulators and fair treatment of customers.

The FCA principle requiring firms to deliver good outcomes for retail customers across products, price and value, understanding, and consumer support.

The longstanding principle that firms must pay due regard to customers' interests and treat them fairly, underpinning outcomes-based supervision of conduct.

A customer whose personal circumstances, such as health, capability or financial resilience, make them especially susceptible to harm from a firm's conduct.

Any communication inviting or inducing engagement with an investment activity; restrictions apply so that promotions are fair, clear and not misleading.

The communication standard requiring client information and marketing to be accurate, balanced and understandable to its intended audience.

The process of classifying clients as retail, professional or eligible counterparty, which determines the level of protection and disclosure owed to them.

A client who is not a professional client or eligible counterparty and therefore receives the highest level of regulatory protection.

A client meeting criteria of experience, size or legal status that qualifies for reduced protections compared with a retail client.

A category of client, typically large financial institutions, to whom the lightest conduct protections apply for certain wholesale transactions.

The obligation to take all sufficient steps to obtain the best possible result for clients when executing orders, considering price, cost, speed and likelihood of settlement.

Situations where a firm's or employee's interests may damage a client's interests; firms must identify, manage and disclose them appropriately.

Payments or benefits given or received in connection with investment services that may create conflicts; rules restrict what can be accepted or paid.

Behaviour such as insider dealing, unlawful disclosure, market manipulation or misleading behaviour that undermines market integrity and is prohibited by law.

Trading or encouraging others to trade in investments using inside information not available to the market, in breach of the market abuse regime.

Precise, non-public information relating to investments or issuers that, if made public, would likely significantly affect the relevant investment's price.

Actions giving false or misleading signals about supply, demand or price of investments, or securing prices at abnormal levels, thereby distorting the market.

The process of concealing the criminal origin of money by moving it through legitimate systems so it appears lawfully obtained.

The checks firms must perform to identify customers, verify their identity and understand their business and risk profile before and during a relationship.

Additional, more intensive checks applied to higher-risk situations such as politically exposed persons, correspondent relationships or unusual transactions.

An individual entrusted with prominent public functions, or a close associate or family member, who presents higher money laundering risk and requires enhanced checks.

A report made to the authorities by a firm or individual who knows or suspects money laundering or terrorist financing, seeking consent to proceed.

Disclosing to a suspect that a suspicious activity report has been made or that an investigation is underway, which is itself a criminal offence.

Any property or benefit derived from criminal conduct, which it is an offence to conceal, transfer or possess under money laundering legislation.

The ethical quality of honesty and consistency between stated values and actions, required of individuals under conduct rules and professional standards.

Reporting wrongdoing within or about a firm to a manager, regulator or other prescribed person, with legal protection against detrimental treatment.