F1PART 1AThe Regulators

CHAPTER 1The Financial Conduct Authority

The FCA's general duties

1BThe FCA's general duties

(1)

In discharging its general functions the FCA must, so far as is reasonably possible, act in a way which—

(a)

is compatible with its strategic objective, and

(b)

advances one or more of its operational objectives.

(2)

The FCA's strategic objective is: ensuring that the relevant markets (see section 1F) function well.

(3)

The FCA's operational objectives are—

(a)

the consumer protection objective (see section 1C);

(b)

the integrity objective (see section 1D);

(c)

the competition objective (see section 1E).

(4)

The FCA must, so far as is compatible with acting in a way which advances the consumer protection objective or the integrity objective, discharge its general functions in a way which promotes effective competition in the interests of consumers.

(5)

In discharging its general functions the FCA must have regard to—

(a)

the regulatory principles in section 3B, and

(b)

the importance of taking action intended to minimise the extent to which it is possible for a business carried on—

(i)

by an authorised person or a recognised investment exchange, or

(ii)

in contravention of the general prohibition,

to be used for a purpose connected with financial crime.

(6)

For the purposes of this Chapter, the FCA's general functions are—

(a)

its function of making rules under this Act (considered as a whole),

F2(aa)

its function of making technical standards in accordance with Chapter 2A of Part 9A;

(b)

its function of preparing and issuing codes under this Act (considered as a whole),

(c)

its functions in relation to the giving of general guidance under this Act (considered as a whole), and

(d)

its function of determining the general policy and principles by reference to which it performs particular functions under this Act.

(7)

Except to the extent that an order under section 50 of the Financial Services Act 2012 (orders relating to mutual societies functions) so provides, the FCA's general functions do not include functions that are transferred functions within the meaning of section 52 of that Act.

F3(7A)

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(8)

“General guidance” has the meaning given in section 139B(5).

1CThe consumer protection objective

(1)

The consumer protection objective is: securing an appropriate degree of protection for consumers.

(2)

In considering what degree of protection for consumers may be appropriate, the FCA must have regard to—

(a)

the differing degrees of risk involved in different kinds of investment or other transaction;

(b)

the differing degrees of experience and expertise that different consumers may have;

(c)

the needs that consumers may have for the timely provision of information and advice that is accurate and fit for purpose;

(d)

the general principle that consumers should take responsibility for their decisions;

(e)

the general principle that those providing regulated financial services should be expected to provide consumers with a level of care that is appropriate having regard to the degree of risk involved in relation to the investment or other transaction and the capabilities of the consumers in question;

(f)

the differing expectations that consumers may have in relation to different kinds of investment or other transaction;

(g)

any information which the consumer financial education body has provided to the FCA in the exercise of the consumer financial education function;

(h)

any information which the scheme operator of the ombudsman scheme has provided to the FCA pursuant to section 232A.

1DThe integrity objective

(1)

The integrity objective is: protecting and enhancing the integrity of the UK financial system.

(2)

The “integrity” of the UK financial system includes—

(a)

its soundness, stability and resilience,

(b)

its not being used for a purpose connected with financial crime,

(c)

its not being affected by F4contraventions by persons of Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation,

(d)

the orderly operation of the financial markets, and

(e)

the transparency of the price formation process in those markets.

1EThe competition objective

(1)

The competition objective is: promoting effective competition in the interests of consumers in the markets for—

(a)

regulated financial services, or

(b)

services provided by a recognised investment exchange in carrying on regulated activities in respect of which it is by virtue of section 285(2) exempt from the general prohibition.

(2)

The matters to which the FCA may have regard in considering the effectiveness of competition in the market for any services mentioned in subsection (1) include—

(a)

the needs of different consumers who use or may use those services, including their need for information that enables them to make informed choices,

(b)

the ease with which consumers who may wish to use those services, including consumers in areas affected by social or economic deprivation, can access them,

(c)

the ease with which consumers who obtain those services can change the person from whom they obtain them,

(d)

the ease with which new entrants can enter the market, and

(e)

how far competition is encouraging innovation.