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Status: You are viewing the version of the handbook as on 2005-06-30.

MIGI 3.1 Principles for businesses

What are the Principles?

MIGI 3.1.1G

The Principles apply to every firm. They are general statements of the main regulatory obligations of authorised firms. The Principles set out in simple terms the high level standards that all firms must meet. They express what is meant by the fit and proper standard set for firms. The rest of the Handbook contains more detailed requirements that expand on these standards.

MIGI 3.1.2G

If your firm contravenes one or more of the Principles, it could face enforcement action. This could, for example, result in your firm's authorisation being removed.

Where are the relevant rules in the Handbook?

MIGI 3.1.3G

The Principles are set out in the Principles for Businesses sourcebook (PRIN) and are also set out below:

The Principles

1

A firm must conduct its business with integrity.

2

A firm must conduct its business with due skill, care and diligence.

3

A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.

4

A firm must maintain adequate financial resources.

5

A firm must observe proper standards of market conduct.

6

A firm must pay due regard to the interests of its customers and treat them fairly.

7

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

A firm must manage conflicts of interests fairly, both between itself and its customers and between a customer and another client.

9

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

A firm must arrange adequate protection for clients' assets when it is responsible for them.

11

A firm must deal with its regulators in an open and cooperative way, and must disclose to the FSA appropriately anything relating to the firm of which the FSA would reasonably expect notice.