The FSA Principles for Businesses are:
1. Afirm must conduct its business with integrity.
2. Afirm must conduct its business with due skill, care and diligence.
3. A firm must take reasonable care to organise and control its affairs
responsibly and effectively, with adequate risk-management systems.
4. Afirm must maintain adequate financial resources.
5. Afirm must observe proper standards of market conduct.
6. A firm must pay due regard to the interests of its customers and treat them fairly.
7. A firm must pay due regard to the information needs of its clients, and communicate information to them in a way that is clear, fair and not misleading.
8. A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.
9. A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgement.
10. A firm must arrange adequate protection for clients’ assets when it is responsible for them.
11. Afirm must deal with its regulators in an open and cooperative way, and must appropriately disclose to the FSA anything relating to the firm of which the FSA would reasonably expect notice.
The Principles are very important. Breaching them could lead to a fine, public censure, or, in the most serious cases, cancellation of the firm’s authorisation (thereby rendering it unable to continue the regulated activity).
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