Financial Conduct Authority (FCA) UK Regulation Sample Exam

Who is primarily responsible for the compliance of a mailshot issued by a firm’s appointed representative (AR)?

1. The FCA

2. The AR itself

3. The authorised firm that is the AR's principal

4. The client receiving the mailshot

The correct answer is: The authorised firm that is the AR's principal

The primary responsibility for the compliance of a mailshot issued by a firm’s appointed representative lies with the authorised firm that is the appointed representative's principal. This is because the principal firm has regulatory oversight and is responsible for ensuring that all activities conducted by the AR, including communications like mailshots, comply with relevant regulations and standards set by the Financial Conduct Authority (FCA). The principal firm must implement adequate systems and controls to supervise the activities of its ARs and ensure that they adhere to compliance obligations. This includes ensuring that the content of any promotional materials, such as mailshots, is not misleading and meets consumer protection requirements. By being responsible for the compliance of its representatives, the principal firm protects consumers and the integrity of the financial market. The other choices either do not have the requisite authority or responsibility. The FCA, while it regulates and enforces standards, does not directly oversee each individual mailshot; rather, it monitors compliance at a broader level. The appointed representative itself may produce the mailshot, but they operate under the principal and do not have full responsibility for compliance. Lastly, the client receiving the mailshot does not bear any responsibility for its compliance; they are the recipient of the information. Thus, the principal firm's accountability solidifies