Under the FCA’s regulatory regime, Paragon is regulated by a series of principles of best practice, the ‘Principles for Businesses’. The FCA rely on this broad set of principles of conduct rather than detailed rules prescribing how outcomes must be achieved.
These principles are provided below and comprise of general statements of the fundamental obligations under the regulatory system – they set out, in simple terms, the high level standards that all firms must meet. If these principles are not followed, then Paragon will leave itself vulnerable to being regarded as not a fit and proper firm. The FCA can take disciplinary action if one or more principles are breached. They need to be part of the culture of Paragon and incorporated at all levels of the business.
The FCA’s eleven ‘Principles for Business’ which Paragon and every regulated firm must adhere to are as follows:
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 FCA appropriately anything relating to the firm of which that regulator would reasonably expect notice.
Paragon is mindful of these principles in the running of its business, it has incorporated them in various manuals and handbooks, such as its Compliance & Procedure Manual, staff handbook and employment contracts.
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