Financial Conduct Authority (FCA) UK Regulation Sample Exam 2025 - Free FCA Practice Questions and Study Guide

A firm requesting authorization to carry out investment business under the Financial Services and Markets Act 2000 (FSMA) must demonstrate that it has adequate resources. This requirement is essential to ensure that the firm is suitably capitalized and has sufficient financial backing to operate effectively in the market. Adequate resources can include having sufficient financial reserves, appropriate staffing levels, and the necessary systems and controls in place to manage the business.

This focus on resources helps protect consumers by ensuring that the firm can withstand financial pressures and continue to operate reliably. It also signifies that the firm is capable of meeting regulatory standards and obligations, which is crucial for maintaining market integrity and consumer confidence in the financial system. This requirement aligns with the FCA's overarching objectives of protecting consumers and promoting competition, ensuring that only well-resourced firms are authorized to conduct investment business.