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

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

Answer: (D)

Regulation that governs how firms interact with customers is about conduct in business. Conduct of Business rules prescribe the procedures financial services firms must follow when dealing with consumers—how information is disclosed, how advice is given, how conflicts of interest are managed, and how complaints are handled. They ensure fair treatment and transparency in everyday customer interactions. This is different from structural regulation, which concerns a firm’s organization and governance; systemic regulation, which looks at risks to the financial system as a whole; and prudential regulation, which focuses on the financial strength and risk management of the firms themselves. So the described prescription of procedures in dealings with consumers fits Conduct of Business.