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TCF Governance Management Responsibility
The board of an FSP resolves that Treating Customers Fairly is 'a matter for the representatives at the point of sale', and asks the compliance officer to report on it once a year. Which statement is correct?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) The board is wrong, because TCF is the FSCA's responsibility, not the FSP's.
- b) The board is wrong: a fair-treatment culture is its own responsibility.Correct
- c) The board is right, because TCF outcomes are measured at the point of sale.
- d) The board is right, provided the compliance officer reports on TCF each year.
Why this is the answer
Outcome 1 requires fair treatment to be central to the firm's culture, and that is the responsibility of the board and senior management. TCF runs through the whole product life cycle, not only the sale, and a yearly compliance report is a check, not ownership. The FSCA supervises TCF; it does not carry it for the firm.
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