ENF 11.7 The standard of reasonable care
In a number of circumstances the regulatory system requires a firm to take reasonable care in relation to particular behaviour. For example, Principle 3 requires a firm to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems, and SYSC 3.1.1 R (taken with SYSC 3.1.2 G) requires a firm to take reasonable care to establish and maintain such systems and controls as are appropriate to the nature, scale and complexity of its business.
In considering whether a firm has taken reasonable care, the FSA will consider all the circumstances of the case, and regards the following as particularly relevant:
- (1)
what information the firm knew at the time of the behaviour, and what information they ought to have known in all the circumstances;
- (2)
what steps the firm took to comply with the rule, and what steps they ought to have taken in all the circumstances; and
- (3)
the standards of the regulatory system that applied at the time of the behaviour.
Similar considerations will apply to those in ENF 11.7.2 G in considering whether an approved person took reasonable care or reasonable steps in relation to particular behaviour.