The prescription of procedures which must be followed by financial services firms in their dealings with consumers is which type of regulation?

• A. Conduct of Business.
• B. Structural.
• C. Prudential.
• D. Systemic.

Answer: (A)

The main concept is conduct of business regulation. This type of regulation sets the procedures and standards that financial services firms must follow in their dealings with customers, covering how advice is given, what disclosures are required, how suitability is assessed, record-keeping, and how complaints are handled. It focuses on the behavior and treatment of clients to ensure fair, transparent, and prudent interactions. Structural regulation, by contrast, deals with the firm’s organization and permissions; prudential regulation with capital, risk management, and financial soundness; and systemic regulation with the stability of the financial system as a whole. So prescribing procedures for consumer dealings clearly aligns with conduct of business regulation.