FSRE 1
FCA Cheat Sheet
Objectives, Consumer Duty, MCOB, affordability, disclosure, complaints, AML and arrears.
Core FCA Objectives
The Financial Conduct Authority regulates UK financial services to:
- Protect consumers
- Protect market integrity
- Promote competition
- Support growth & innovation
Key FCA themes
- Consumer Duty
- Good customer outcomes
- Responsible lending
- Financial crime prevention
- Operational resilience
- Mortgage Rule Review
FCA Principles for Businesses
Treat Customers Fairly (TCF)
- Act honestly, fairly and professionally
- Put customer interests first
- Give clear, fair & not misleading information
Consumer Duty (VERY IMPORTANT)
- Good outcomes for retail customers
- Fair value
- Consumer understanding
- Consumer support
Applies across
- Product design
- Advice
- Communications
- Ongoing service
Key Mortgage Regulation Rules
MCOB = Mortgage Conduct of Business. Main FCA mortgage rulebook covering:
- Advice standards
- Affordability
- Disclosure
- Arrears handling
- Remortgages
- Equity release
Mortgage Advice Types
| Type | Meaning |
|---|---|
| Advised | Adviser recommends suitable mortgage |
| Execution-only | No advice given |
| Information only | Facts provided without recommendation |
Regulated Mortgage Contract
Usually:
- Secured on UK land
- At least 40% occupied by borrower/family
Affordability Rules
Lenders must assess
- Income
- Expenditure
- Credit commitments
- Stress testing
- Future affordability
FCA focus in 2026
- Supporting borrowers in difficulty
- Simplifying mortgage rules
- Sustainable home ownership
Disclosure Documents
ESIS / KFI — customer must receive a mortgage illustration showing:
- Interest rate
- APRC
- Monthly payments
- Fees
- Risks
Financial Promotions Rules
All promotions must be clear, fair and not misleading. Risk warnings must be prominent.
Applies to
- Social media
- Websites
- Emails
- Advertisements
Complaints Procedure (DISP)
Firms must:
- Acknowledge complaint promptly
- Resolve fairly
- Issue final response within 8 weeks
If unresolved
- Customer can escalate to the Financial Ombudsman Service
Financial Crime & AML
Firms must prevent
- Money laundering
- Fraud
- Terrorist financing
Key checks
- ID verification
- Source of funds
- Suspicious activity reporting
Data Protection
Main law: Information Commissioner's Office / UK GDPR. Customers have rights to:
- Access data
- Correct data
- Request deletion
Mortgage Arrears Rules
Firms must
- Treat customers fairly
- Consider forbearance options
- Avoid unnecessary repossession
Possible solutions
- Term extension
- Payment holiday
- Interest-only temporary switch