CISI Regulatory Practice Exam

The Financial Conduct Authority (FCA) derives its powers from the Financial Services Act (FSA) 2012, which was designed to enhance the regulation of financial services in the UK. One significant power granted to the FCA under this legislation is the authority to ban misleading promotions. This is crucial because it helps protect consumers from deceptive advertising practices that may misrepresent financial products or services.

By having the ability to intervene in misleading promotions, the FCA can enforce the principles of transparency and fairness in financial marketing, ensuring that consumers make informed decisions based on accurate information. This power aligns with the FCA's broader objectives of promoting competition and protecting consumers within the financial services industry.

The other options pertain to responsibilities and powers that do not align with the FCA’s mandate under the FSA 2012. Setting interest rates is generally the domain of central banks, while appointing bank directors typically falls under corporate governance structures rather than regulatory powers. Drafting fiscal policy is the purview of the government and treasury rather than a regulatory body like the FCA.