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FAIS Act FAIS Act and Subordinate Legislation
Which of the following best describes the relationship between the Prudential Authority and the FSCA under Twin Peaks?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) The Prudential Authority focuses on the safety and soundness of institutions, while the FSCA focuses on market conduct and customer fairness.Correct
- b) They are the same body with two names.
- c) The FSCA sets interest rates and the Prudential Authority licenses FSPs.
- d) Neither has any role in financial-sector regulation.
Why this is the answer
Twin Peaks splits regulation into prudential (safety and soundness of institutions — the Prudential Authority in the SARB) and conduct (market conduct and customer fairness — the FSCA). They are distinct bodies with complementary mandates.
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