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R01 > Regulation Of Financial Services > Flashcards

Regulation Of Financial Services Flashcards

1
Q

Three pieces of legislation containing financial services regulatory system

A
  1. Financial Services and Markets Act 2000
  2. Financial Services Act 2012
  3. Bank of England and Financial Services Act 2016
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2
Q

What body is responsible for reviewing complaints against firms?

A

Financial Ombudsman Service

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3
Q

What body is responsible for compensation to customers where regulated entity cannot meet its liabilities?

A

Financial Services Compensation Scheme

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4
Q

What three bodies replaced the FSA in 2013?

A
  1. Financial Policy Committee
  2. Prudential Regulation Authority
  3. Financial Conduct Authority
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5
Q

Name the three financial authorities.

A
  1. HM Treasury
  2. Bank of England
  3. Financial Conduct Authority
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6
Q

Which two authorities are part of the Bank of England

A
  1. Prudential Regulation Authority

2. Financial Policy Committee

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7
Q

4 responsibilities for Bank of England

A
  1. Settling of payments
  2. Functioning of UK markets
  3. Regulation of banks and larger financial firms
  4. Provision of routine and emergency liquidity to banking system
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8
Q

Bank of England’s two core purposes

A
  1. Monetary stability (stable prices/currency)

2. Financial stability (detecting and reducing threats)

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9
Q

FPC’s two objectives

A
  1. Identify, monitor, and remove systemic risks

2. Support economic policy of government

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10
Q

Objectives of PRA

A
  1. Promote safety and soundness of financial firms, and contribute to appropriate degree of protection for insurance policy holders
  2. Facilitate effective competition
  3. To facilitate competition in the market for services provided by PRA-regulated firms
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11
Q

What are the FCA’s 3 operational objectives?

A
  1. Consumer protection
  2. Integrity of the financial system
  3. Competition
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12
Q

What are the FCA’s 8 regulatory principles?

A
  1. Efficiency and economy
  2. Proportionality
  3. Sustainable growth
  4. Consumer responsibility
  5. Senior management responsibility
  6. Recognise differences in businesses of different regulated persons
  7. Openness and disclosure
  8. Transparency
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13
Q

Who are the three European Supervisory Authorities?

A
  1. European Securities and Markets Authority
  2. European Insurance and Occupational Pensions Authority
  3. European Banking Authority
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14
Q

What are the ESA’s roles?

A
  1. To create a single rulebook across EU countries
  2. To investigate national supervisors
  3. To temporarily ban certain financial activities
  4. To promote EU wide coordination and mediation
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15
Q

Who do the Markets in Financial Instruments Directives regulate?

A

Firms which provide services to clients linked to financial instruments (shares, bonds, units in collective investments, derivatives)

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16
Q

When might an IFA firm be exempt from MiFID?

A
  1. Only advises UK-based customers
  2. Do not hold or control client’s money or securities
  3. Do no provide services other than reception and transmission of orders, or investment advice
17
Q

What are the key provisions of the Insurance Distribution Directive? (7)

A
  1. Professionalism
  2. Commission disclosure
  3. Harmonisation
  4. Product Governance Requirements
  5. Ancillary Insurance Intermediaries
  6. New duties for non-FCA authorised companies
  7. Insurance Product Information Docs
18
Q

Which directive and regulation implemented the Basel accords?

A
  1. Capital Requirements Directive

2. Capital Requirements Regulation

19
Q

What are the three pillars of the Basel Accord framework

A
  1. Minimum capital requirements
  2. Firms and supervisors to consider whether additional capital is needed
  3. Firms to publish details of their risks, capital, and risk management
20
Q

CRD IV’s four additional requirements

A
  1. Quality and quantity of capital
  2. Liquidity and leverage requirements
  3. Rules for counterparty risk
  4. Enhanced capital buffers for strategically important businesses
21
Q

5 key areas of the Money Laundering and Terrorist Financing Regulations 2019 (5MLD)

A
  1. Additional risk-factors requiring enhanced due diligence
  2. Ultimate beneficial owners lists
  3. Firms to update records relating to beneficial owners
  4. Firms to report discrepancies in ownership of corporate clients
  5. Registration of all UK express trusts
22
Q

What body is responsible for setting standards in the fight against money laundering and terrorist financing?

A

The Financial Action Task Force

23
Q

What is the role of the Joint Money Laundering Steering Group?

A

To produce guidance to assist financial industry in complying with money laundering obligations

24
Q

Which Regulation introduced requirement to provide Key Information Documents?

A

Packaged Retail and Insurance-Based Investment Products Regulations

25
Q

Name the 3 bodies other than FCA with responsibility for regulating parts of consumer regulation

A
  1. Competition and Markets Authority
  2. HMRC
  3. Pensions Regulator
26
Q

5 strategic goals of the CMA

A
  1. Delivering effective enforcement
  2. Extending competition frontiers
  3. Refocusing consumer protection
  4. Achieving professional excellence
  5. Developing integrated performance
27
Q

5 aims of Pension Regulator

A
  1. Protect scheme members’ benefits
  2. Promote good administration
  3. Reduce risk of compensation claims from Pension Protection Fun arising
  4. Maximise employer compliance with Pensions Act
  5. Minimise impact of sustainable growth on defined benefit schemes
28
Q

How much can the Pension Regulator fine individuals and businesses?

A

Individuals £5,000

Businesses £50,000

29
Q

5 legal instruments under ICO’s oversight

A
  1. GDPR
  2. Data Protection Act 2018
  3. Privacy and Electronic Communications Regulations
  4. Freedom of Information Act 2000
  5. Environmental Information Regulations
30
Q

3 things a firm must have a framework in place for in order to meet compliance requirements

A
  1. Assessing and covering risks
  2. Meeting regulatory requirements
  3. Checking firm continues to be compliant

R01 (5 decks)

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