Which of the following is a fundamental PRA rule?

• A. Deal with regulators open and cooperative
• B. Act in a prudent manner
• C. Conduct business w/ integrity
• D. Prepare for resolution

Answer: (C)

Integrity in how a firm conducts itself is the fundamental PRA rule. This means honesty, fair dealing, and not misleading customers or counterparties. When a firm operates with integrity, it builds trust in the market and among clients, which is the bedrock upon which all other regulatory expectations stand.

That’s why this option is the best choice: it encapsulates the baseline standard that all other rules presuppose. If a firm breaches integrity, even if it acts prudently or has plans for resolution, the trust and fairness essential to the financial system are eroded.

The other ideas—dealing with regulators openly, acting prudently, and preparing for resolution—are important practices or objectives, but they are not the fundamental rule the PRA requires of every firm at all times.