The Financial Conduct Authority (FCA) is the conduct regulator for 56,000 financial services firms and financial markets in the UK and the prudential regulator for over 24,000 of those firms. The FCA plays a critical role in the UK economy ensuring that financial markets are honest, Treats Customers Fairly (TCF), small and large businesses and the UK economy as a whole
What is TCF?
Treating Customers Fairly is an outcomes-based regulatory and supervisory approach. It was implemented to ensure that specific fairness outcomes are delivered by regulated financial firms to their consumers.
The FCA has articulated the essential business principles and appropriate professional culture, it expects from regulated organisations.
1. Integrity – A firm must conduct its business with integrity.
2.Skill, care and diligence – A firm must conduct its business with due skill, care and diligence.
3. Management and control – A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.
4.Financial prudence – A firm must maintain adequate financial resources.
5. Market conduct – A firm must observe proper standards of market conduct.
6.Customers’ interests – A firm must pay due regard to the interests of its customers and treat them fairly.
7. Communications with clients – A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading.
8. Conflicts of interest – A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.
9. Customers: relationships of trust – 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 judgment.
10. Clients’ assets – A firm must arrange adequate protection for clients’ assets when it is responsible for them.
11. Relations with regulators – A firm must deal with its regulators in an open and cooperative way, and must disclose to the appropriate regulator appropriately anything relating to the firm of which that regulator would reasonably expect notice.
If your firm is regulated, then your senior management team is required to deliver fair outcomes by recruiting competent staff, providing ongoing training, monitoring employees performance and supplying records of compliance. If a regulated organisation fails to uphold any or more of the above principles, the FCA can investigate, fine and prosecute accordingly.
The 6 Outcomes expected of regulated firms are:
- Customers need to be confident that they are dealing with an organisation which places importance on the
- principles of TCF.
- Product and services meet the needs of consumers and are targeted appropriately.
- Consumers are given clear information during and after the point of sale.
- Any advice given to the consumer is suitable and relevant.
- Consumers are provided with items/services that meet an acceptable standard.
- Consumers do not experience any post sale barriers for example, change of product, service provider or poor complaints handling.
Training your staff is a great first step in ensuring you are complying with your TCF obligations. The Treating Customers Fairly online training course from EssentialSkillz, is a course designed to introduce employees who work in the financial sector to the principle of treating customers fairly, so as to raise standards in ways that benefit
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