UK Regulation and Professional Integrity
Definitions
Accumulation and Maintenance Trust – A trust designed for
children/young adults up to age 25, where trustees have discretion over
income use. Income used for maintenance, with surplus accumulated.
Acting as Agent – Acting on behalf of another party (e.g. an IFA
executing trades for a client).
Acting as Principal – Acting on one’s own account.
Aggregation – Multiple client orders are bulked together and processed
as a single order. Customers must be notified of this procedure and its
advantages and disadvantages.
Allocation – The division of a single aggregated order between two or
more investors' accounts.
Appointed Representative – Any type of person who must be party to a
contract with an authorised person allowing them to carry on certain
regulated activities. The authorised person must have accepted
responsibility in writing for those activities.
Approved Persons (APER) – Individuals approved by the FCA who must
comply with the FCA’s Statements of Principle and Code of Practice for
Approved Persons. Applies only to a limited number of individuals.
Balance of Payments – A measure of the payments between a country
and others, made up of imports and exports of goods and services.
Balanced Budget Multiplier – Raising taxes and government spending
by equal amounts.
Bankruptcy – A legal process for individuals who cannot meet their
debts.
Bare Trust – A trust where the trustee holds property for a single
beneficiary who is absolutely entitled to both income and capital usually
until when the beneficiary turns 18.
Basel Framework – PRA-created framework requiring banks to meet
minimum capital requirements, pass stress tests and hold additional
capital for governance weaknesses.
Best Execution – Firms must consider price, costs, speed, likelihood of
execution and settlement, and the size and nature of the deal when
determining how to obtain the best outcome for a client.
1
, UK Regulation and Professional Integrity
Bribery Act 2010 breach punishment –Individual: Up to 10 years’
imprisonment and unlimited fine. Company: Unlimited fine.
Broad Money – The total sum of a wide range of assets, including
savings accounts that do not provide instant access.
Capital Requirements Directive (CRD) – Sets out financial rules for
financial firms. Applies to banks, building societies and most investment
firms to ensure adequate financial resources and appropriate systems and
controls.
Categorical Imperative – Kant’s principle of acting because it is morally
right, not out of obligation.
Certificate Regime – Part of SMCR. Individuals are not approved by
regulators but are certified by their firm as “fit and proper.” FCA and PRA
criteria differ.
Chattel – Personal movable property.
Churning – Excessive trading by a broker to generate commission
regardless of the client’s interests.
Client – A client or an eligible counterparty.
Client Assets/Money – Securities or other assets held by a firm on
behalf of its clients. Must be kept separate from the firm’s own assets.
Collective Investment Scheme (CIS) – Open-ended funds such as unit
trusts and OEICs.
Common Platform Firm – Firms subject to CRD or MiFID II.
Compulsory Jurisdiction – The range of activities for which complaints
fall within the compulsory jurisdiction of the FOS.
Conduct of Business Sourcebook (COBS) – FCA rules under FSMA
2000 governing the relationship between authorised firms and their
clients.
Conduct Rules – Part of SMCR. All UK-based employees of relevant firms
are subject to high-level conduct rules, with additional rules for senior
managers.
Consumer Duty – Introduces a new principle, cross-cutting rules and
outcomes for the treatment of retail customers. Deliver good outcomes for
retail consumers.
2
Definitions
Accumulation and Maintenance Trust – A trust designed for
children/young adults up to age 25, where trustees have discretion over
income use. Income used for maintenance, with surplus accumulated.
Acting as Agent – Acting on behalf of another party (e.g. an IFA
executing trades for a client).
Acting as Principal – Acting on one’s own account.
Aggregation – Multiple client orders are bulked together and processed
as a single order. Customers must be notified of this procedure and its
advantages and disadvantages.
Allocation – The division of a single aggregated order between two or
more investors' accounts.
Appointed Representative – Any type of person who must be party to a
contract with an authorised person allowing them to carry on certain
regulated activities. The authorised person must have accepted
responsibility in writing for those activities.
Approved Persons (APER) – Individuals approved by the FCA who must
comply with the FCA’s Statements of Principle and Code of Practice for
Approved Persons. Applies only to a limited number of individuals.
Balance of Payments – A measure of the payments between a country
and others, made up of imports and exports of goods and services.
Balanced Budget Multiplier – Raising taxes and government spending
by equal amounts.
Bankruptcy – A legal process for individuals who cannot meet their
debts.
Bare Trust – A trust where the trustee holds property for a single
beneficiary who is absolutely entitled to both income and capital usually
until when the beneficiary turns 18.
Basel Framework – PRA-created framework requiring banks to meet
minimum capital requirements, pass stress tests and hold additional
capital for governance weaknesses.
Best Execution – Firms must consider price, costs, speed, likelihood of
execution and settlement, and the size and nature of the deal when
determining how to obtain the best outcome for a client.
1
, UK Regulation and Professional Integrity
Bribery Act 2010 breach punishment –Individual: Up to 10 years’
imprisonment and unlimited fine. Company: Unlimited fine.
Broad Money – The total sum of a wide range of assets, including
savings accounts that do not provide instant access.
Capital Requirements Directive (CRD) – Sets out financial rules for
financial firms. Applies to banks, building societies and most investment
firms to ensure adequate financial resources and appropriate systems and
controls.
Categorical Imperative – Kant’s principle of acting because it is morally
right, not out of obligation.
Certificate Regime – Part of SMCR. Individuals are not approved by
regulators but are certified by their firm as “fit and proper.” FCA and PRA
criteria differ.
Chattel – Personal movable property.
Churning – Excessive trading by a broker to generate commission
regardless of the client’s interests.
Client – A client or an eligible counterparty.
Client Assets/Money – Securities or other assets held by a firm on
behalf of its clients. Must be kept separate from the firm’s own assets.
Collective Investment Scheme (CIS) – Open-ended funds such as unit
trusts and OEICs.
Common Platform Firm – Firms subject to CRD or MiFID II.
Compulsory Jurisdiction – The range of activities for which complaints
fall within the compulsory jurisdiction of the FOS.
Conduct of Business Sourcebook (COBS) – FCA rules under FSMA
2000 governing the relationship between authorised firms and their
clients.
Conduct Rules – Part of SMCR. All UK-based employees of relevant firms
are subject to high-level conduct rules, with additional rules for senior
managers.
Consumer Duty – Introduces a new principle, cross-cutting rules and
outcomes for the treatment of retail customers. Deliver good outcomes for
retail consumers.
2
