Published May 2026 · 8 min read
Quick answer: There are 12 FCA Principles for Business. The original 11 have applied since 2001. Principle 12 — the Consumer Principle, part of the Consumer Duty — was added on 31 July 2023 and displaces Principles 6 and 7 for retail customers. Principles 6 and 7 still apply in full outside the scope of the Consumer Duty.
The FCA's Principles for Business are the foundation of UK financial regulation. Everything else — COBS, CASS, MAR, the Senior Managers Regime — sits on top of them. Understanding the Principles is not just useful for the CISI UK Financial Regulation exam; it is the framework that makes the rest of the rulebook coherent.
The Principles for Business (PRIN) are twelve high-level obligations that apply to every FCA-authorised firm. They are not detailed rules — they are statements of the standard of behaviour the FCA expects from regulated firms at all times.
The FCA can take enforcement action against a firm for breaching a Principle even if no specific rule has been broken. A firm that technically complies with every detailed rule but acts in a way that undermines the spirit of the Principles is still in breach.
1 — Integrity
A firm must conduct its business with integrity. Dishonesty, bad faith, deliberate misleading of clients or the regulator — all breach Principle 1.
2 — Skill, Care and Diligence
A firm must conduct its business with due skill, care and diligence. Incompetence that causes harm can breach this Principle even where there is no dishonesty.
3 — Management and Control
A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.
4 — Financial Prudence
A firm must maintain adequate financial resources. Firms must hold enough capital to absorb losses and continue operating.
5 — Market Conduct
A firm must observe proper standards of market conduct. Firms must not engage in behaviour that distorts markets or undermines market integrity.
6 — Customers' Interests
A firm must pay due regard to the interests of its customers and treat them fairly. Displaced by Principle 12 for retail customers — see below.
7 — Communications with Clients
A firm must communicate information to clients in a way that is clear, fair and not misleading. This underpins all financial promotions rules. Also displaced by Principle 12 for retail customers.
8 — Conflicts of Interest
A firm must manage conflicts of interest fairly, both between itself and its customers and between customers.
9 — Customers: Relationships of Trust
A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for customers entitled to rely on its judgement.
10 — Clients' Assets
A firm must arrange adequate protection for clients' assets when it is responsible for them. This underpins the detailed CASS rules.
11 — Relations with Regulators
A firm must deal with its regulators in an open and cooperative way, and disclose to the FCA anything the FCA would reasonably expect notice of.
12 — Consumer Duty (the Consumer Principle)
A firm must act to deliver good outcomes for retail customers. Added to the FCA Handbook on 31 July 2023, Principle 12 sets a higher standard than Principles 6 and 7 for retail-facing activity. Where it applies, it displaces Principles 6 and 7 entirely — it does not simply sit alongside them.
The exam will not typically ask you to recite which Principle is which number. It will present scenarios and ask which Principle has been breached, or whether a firm's conduct is consistent with its regulatory obligations.
Principle 7 — Questions about misleading communications outside the scope of Consumer Duty almost always involve Principle 7 — clear, fair and not misleading.
Principle 9 — Questions about unsuitable advice involve Principle 9.
Principle 10 — Questions about client money or client assets involve Principle 10.
Principle 11 — Questions about a firm failing to disclose something to the FCA involve Principle 11.
Principle 6 — Outside the scope of Consumer Duty, the broadest of the original Principles — appears in scenarios where a firm benefits at the expense of the client.
Principle 12 — Questions about Consumer Duty, retail customer outcomes, or the four Consumer Duty outcomes (products and services, price and value, consumer understanding, consumer support) involve Principle 12 — and signal that Principles 6 and 7 are not the answer.
Principle 12 came into force on 31 July 2023 for all open products and services, and fully from 31 July 2024 for closed products. It requires firms to act to deliver good outcomes for retail customers across four areas: products and services, price and value, consumer understanding, and consumer support.
Principle 12 does not simply add a thirteenth obligation. Where the Consumer Duty applies, it displaces Principles 6 and 7 — those two Principles continue to apply only where Principle 12 does not reach (for example, in wholesale or non-retail contexts).
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