Prudential regulation of credit institutions and investment firms Investment Firms Prudential Regime The FCA’s general rule-making power and objectives
Section 137A of FSMA provides the FCA with a general rule-making power to make requirements applying to FCA authorised persons to advance the FCA’s operational objectives. Section 1B(2) of FSMA specifies the strategic objective of the FCA, which focuses on ensuring that relevant markets function well. Sections 1C to 1E of FSMA also set out three further ‘operational’ objectives of the FCA, focused on consumer protection; protecting the integrity of the UK financial system; and promoting effective competition. When discharging its obligations, the FCA must act in a way that is compatible with the strategic objective and that advances one or more of the operational objectives.
	The Act requires the FCA to make rules with respect to the prudential regulation of investment firms. The FCA will rely in part on its existing general FSMA rule-making power to do so.