SIDC Module 9 key terms

The UK professional body that sets qualifications and standards for people working in securities, investment, and wholesale financial services. It publishes the rulebooks and exam syllabuses many firms use for mandatory staff training.

The Securities and Investment Institute's professional designation and examination programme covering UK financial regulation, markets, and conduct requirements. Candidates typically complete several modules and must meet continuing education obligations after certification.

The UK regulator responsible for conduct in retail and wholesale financial markets and for prudential supervision of firms not supervised by the Prudential Regulation Authority. It writes the Handbook rules candidates must know.

The Bank of England subsidiary that supervises the safety and soundness of banks, insurers, and major investment firms. It sets capital and liquidity requirements, while conduct matters sit with the FCA.

The consolidated rulebook of the UK conduct regulator, organised into modules such as Principles for Businesses, Conduct of Business, and Market Conduct. Firms must comply with the rules, guidance, and evidential provisions it contains.

Eleven high-level obligations in the FCA Handbook covering integrity, skill and care, management and control, financial prudence, market conduct, and client interests. They apply to all regulated firms and can be enforced even where no specific rule exists.

A conduct principle requiring firms to deliver fair outcomes for retail customers across product design, marketing, advice, and after-sales service. Firms evidence it through management information and cultural indicators rather than a single checklist.

An FCA standard requiring firms to act to deliver good outcomes for retail customers in four areas: products and services, price and value, consumer understanding, and consumer support. It raises the bar above mere disclosure compliance.

The UK accountability framework that assigns defined responsibilities to named senior managers, requires certification of staff in significant roles, and imposes conduct rules on almost all employees. It replaced the Approved Persons Regime for most firms.

A designated role under SM&CR for which an individual must be pre-approved by the regulator before starting. Each function carries a documented statement of responsibilities, and holders are accountable for that area.

The behavioural standards under SM&CR that apply to nearly all staff, covering integrity, due skill and care, cooperation with regulators, and treating customers fairly. Breach can lead to personal disciplinary action.

An individual approved by the regulator to perform a controlled function before SM&CR replaced much of that regime. The term still appears for certain roles and legacy references in the Handbook.

The test regulators apply to assess whether a person has the honesty, competence, financial soundness, and reputation to hold a regulated role. Past misconduct, insolvency, or regulatory censure is relevant to the assessment.

The process of identifying a client, verifying identity from reliable documents, and understanding the purpose of the relationship before providing services. It underpins anti-money-laundering controls and ongoing monitoring.

Laws, rules, and internal controls designed to prevent criminals from disguising proceeds of crime as legitimate funds. Firms must appoint a nominated officer, train staff, monitor transactions, and report suspicions.

The risk-based steps a firm takes to identify and verify clients and beneficial owners, and to understand the nature of the business relationship. Enhanced measures apply to higher-risk clients such as politically exposed persons.

A person entrusted with prominent public functions, plus close associates and family members, who presents higher corruption risk. Firms must apply enhanced due diligence and senior approval before establishing the relationship.

Additional checks applied to higher-risk relationships, such as obtaining extra identity evidence, verifying source of funds and wealth, and increasing monitoring. Senior sign-off is usually required before onboarding.

A confidential disclosure to the National Crime Agency when a firm knows, suspects, or has reasonable grounds to suspect money laundering or terrorist financing. Firms generally need consent to continue handling the funds.

The offence of revealing to a suspect that a suspicious activity report has been made or that an investigation is underway, where that disclosure could prejudice the investigation. It is distinct from the general duty of confidentiality.

Behaviour such as insider dealing, unlawful disclosure of inside information, and market manipulation that undermines market integrity. It is a civil and criminal offence with significant personal and corporate penalties.

Precise, non-public information relating to an issuer or financial instrument that, if made public, would likely significantly affect the instrument's price. Handling it triggers restrictions on dealing and disclosure.

Trading, or encouraging another to trade, on the basis of inside information, or disclosing it outside the proper course of employment. It is a criminal offence prosecuted under market abuse legislation.

Conduct that gives false or misleading signals about the supply, demand, or price of a financial instrument, such as wash trades or spoofing. Intent is often inferred from trading patterns and order-book behaviour.

A transaction where both buyer and seller are the same beneficial owner, creating an appearance of trading volume without a genuine change in economic interest. It is a form of market manipulation.

Placing orders with no intention of executing them in order to move prices or mislead other participants, then cancelling before execution. Regulators treat it as manipulative conduct under market abuse rules.

Internal information barriers that separate teams with potentially conflicting knowledge, such as corporate finance and trading, to prevent misuse of confidential information. Physical and electronic controls support the separation.

Situations where a firm's or employee's interests could damage a client's interests, such as proprietary trading alongside client dealing. Firms must identify, manage, and disclose material conflicts.

A fee, commission, or non-monetary benefit paid or received by a firm in connection with investment services that may bias advice. Rules restrict such payments unless they enhance service quality and are disclosed.

The obligation to take all sufficient steps to obtain the best possible result for clients when executing orders, considering price, cost, speed, likelihood of execution, and settlement. Firms must have and monitor an execution policy.

Funds held by a firm on behalf of clients, which must be segregated from the firm's own assets and protected if the firm fails. Rules govern holding, reconciliation, and treatment of interest.

The FCA Client Assets Sourcebook, setting rules on holding client money and safe custody assets, including segregation, records, reconciliation, and the client money calculation. Compliance protects clients on insolvency.

The practice of keeping client money and custody assets separate from the firm's own funds so they can be returned promptly on insolvency. It requires distinct accounts and accurate records.

The requirement to ensure a recommendation or discretionary decision is suitable for a client's objectives, financial situation, risk appetite, and knowledge. Firms must gather and document adequate client information.

A test applied where a firm provides a service without advice, assessing whether the client has the experience and knowledge to understand the risks. It is narrower than the suitability assessment.

A client's capacity and willingness to accept losses or volatility in pursuit of returns. It informs asset allocation and must be documented and reviewed as circumstances change.

A client whose circumstances, such as poor health, bereavement, low literacy, or financial difficulty, make them especially susceptible to harm. Firms must adjust communications and processes to achieve fair outcomes.

The ongoing learning and training required to maintain competence and certification. Firms typically set annual hours and record evidence of relevant technical and regulatory updates.

The documented process for receiving, investigating, and resolving client complaints within set time limits, including redress and referral to the Financial Ombudsman Service. Firms must report complaint data to the regulator.

An independent UK body that resolves disputes between consumers and financial firms when internal complaints are unresolved. Its decisions are binding on the firm if the consumer accepts them.

The UK compensation scheme of last resort that pays eligible claimants when an authorised firm fails and cannot meet claims. Coverage limits differ by product type, such as deposits and investments.