Under the dual-regulation framework, who conducts regulation for dual-regulated firms?

In the context of dual-regulation in the UK financial services sector, both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) play distinct roles in overseeing dual-regulated firms. This regulatory framework is designed to ensure that firms are not only adhering to conduct standards but also maintaining adequate financial stability and soundness.

The FCA is primarily responsible for regulating the conduct of businesses, ensuring that they treat customers fairly and operate within the regulations designed to protect consumers. Meanwhile, the PRA focuses on the prudential regulation aspect, overseeing the financial health of institutions to mitigate systemic risk within the banking sector and to ensure that firms hold enough capital and liquidity to withstand financial pressures.

By requiring both regulators to be involved, dual-regulation ensures a comprehensive approach to regulatory oversight, meaning that firms have to comply with both conduct and prudential standards. Therefore, this collaboration between the FCA and PRA is critical for maintaining a stable and trustworthy financial system.