Chapter 1 Flashcards
(127 cards)
1
Q
What are the 8 principles of good regulation?
A
East Coast park is Sustainable Cause Senior Residents Ocean Trees
2
Q
East
A
Efficiency and Economy
3
Q
Park
A
Proprotionality
4
Q
Sustainable
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Sustainble growth
5
Q
Cause
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Consumer responsibility
6
Q
Senior
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Senior Management responsibility
7
Q
Residents
A
Recognising differences in business carried on by different regulated persons
8
Q
Ocean
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Opennes and disclosure
9
Q
Trees
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Transaprency
10
Q
11 Principles for Business
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I Sell My Financial Markets Course and classes con customers and clients regularly
11
Q
I
A
Integrity
12
Q
Sell
A
Skill care diligence
13
Q
My
A
Management and control
14
Q
Financial
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Financial prudence
15
Q
Markets
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Market Conduct
16
Q
Class
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Customer interest
17
Q
Course
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Communication with clients
18
Q
Con
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Conflicts of interest
19
Q
Customer
A
Customer Trust
20
Q
Clients
A
Client asset
21
Q
Regularly
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Relation with regulators
22
Q
5 Compulsory Conduct Rules for NEDs and staff (SM&CR functions)
A
I Saw Cute Indian Parents
23
Q
I
A
Integrity
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Q
Saw
A
Skill care diligence
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Cute
Cooperative
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Indian
Interest of customer
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Parents
Proper standards fo market conduct
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What are the 4 Second Tier Rules for Senior managers (SM Functions)
Cute Couple Does date
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Cute - Senior managers code of conduct
Controlled effectively
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Couple
Comply with requirements
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Does
delegated responsibiltiy
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Date
Disclose Appropriately
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What are the 4 statement principles for approved persons?
I Saw Cute Parents
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I
Integrity
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Saw
Skill Care Diligence
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Cute
COoperative
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Parents
Proper Standards
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What are the 4 requirements of senior managers and directors
In the SYSC handbook
ACES
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A
Apportionment of responsibility
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C
Common platform and standards
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E
Effective organisation and control
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S
Senior management responsibility
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The statement of responsibilities (SoRs) is required under? What is it
FSMA. States what senior managers are responsible and accountable for, not how they carry out those responsibilities
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What are the 4 controlled functions for SM&CR firms
Gordon Ramsay Has Stars
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Gordon
Governing functions -
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Ramsay
Required functions
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Has
High level management
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Stars
Systems and control functions
49
What is S.165 of FSMA
FCA has power to require firms to provide it with infomration and documents to support supervisory adn enforcement functions
50
What is Part 26 and Part 26A of the COmpany Act
Schemes of Arrangement (26A for significant financial difficulty)
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What are the procedures for Part 26
Explanatory statement, Members and creditors meeting (75% value approval), court apporval
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What is S974-985 of the FSMA
Squeeze out and Sell out
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What is the period of notice needed to hold a GM. What is the max period of disapplication of pre-emption rights?
14 days, 5 years
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What is max discount for non-pre-emption issue
10%
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For disapplicaiton of pre-emption rights, whats the max amount
5% 1 year issued or 7.5% 3 year rolling
56
Who can call for BEIS investigation?
200 members with 10% issued share capital
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What is section 678-680 of the Companies Act
What is the sentence?
Relating to prohibition of financial assistance
2 years and or fine
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What is notice period for AGM
every 6 months, 21 days notice for public and 14 days for private companies
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What is notice period for GM
21 days, but can be reduced to 14 days at an AGM for listed companies. But for unlisted companies can be 14 days
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How can shareholders call for GM
5% of voting rights can call for GM, must have 21 days notice, held within 28 days
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How to shroten notice period of GM?
95% of voting rights agree to notice period, 90% for private companies
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Who can propose resolutions
Shareholders representing 5% voting rights or 100 shareholders with 100 paid up cash each
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What is the quorum to pass resolutions
2
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What is S793 of the companies Act
**Public company** can have power to issue notice person who it believes to have an interest in tis share past 3 years
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What are 2 documents needed by company
Memorandum association and articles of association
-article is more important: establish relationship between company and shareholders
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What is S.170-175 of Companies Act
Directors Duties and Conflicts of interest
67
What are the 3 stages of ML. What is the primary and secondary legislation?
Placement, layering, integration. POCA, MLR
JMLSG is a guidance
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What are the 5 offences of POCA
FAACT
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FAACT
Failure to disclose, Arranging, acquisitions, Concealing, Tipping off
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What are the sentences? For Money Laundering
Criminal offences. AAC: 14 years and or fine
FT: apply only to regulated sctor, 5 yeras and or both
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What is POCA part 7
Prejudciing Investigations
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Supervision of the regulated sector (law firms, casino operators,
accountants) are by who
HMRC and FCA
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When should firm identify customer?
enter into business relationship with a party or undertaking transaction of 15,000 more outside of business relationship
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What are the 3 offences of insider dealing
DED
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DED
deal, encourage, disclose inside information
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What instruments does insider dealing exclude
Comodities andderivatives on commodities, FX and related, unit shares and OEICs
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What is part 7, S.89-95of FSA 2012.
Misleading statements and impressions
Misleading statements relating to benchmarks as well
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Where is part 7 FSA 2012 applied
Take place within UK or have effect within UK
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What are the 3 offences under MAR
DED
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DED
Dealing, encourage(manipulate), disclosure
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Differences between Insider Dealing under MAR and CJA
MAR include spot commodity contracts and benchmarks, emission allowances. So CJA smaller range, MAR wider range of investments
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What are the 5 types of Market Abuse
i Use my Macbook and Desktop
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I
Insider Dealing
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Use
Unlawful disclosure
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My
Manipulating transactions
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Macbook
manipulating devices
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Desktop
Dissemination
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What is the key aim of MiFID
Obtain best possible result for client, act in clients best interest
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Who does the MiFID mainly concern
Investment firms, trading venues, and data providers. Essentially people providing investment services or activities in the UK
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What are some core services
arranging, dealing, executing, portfolio management, investments advice, dealing on own portfolio
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What are ancillary MiFid
Safekeeping and administering, FX services, investment research and analysis, services in relation to underwriting,
Advice on capital structure
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What are excluded investments under the Specified investments (FSMA)?
Premium bonds, commodities, FX, tangible properties
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What investments are excluded for CJA?
Commodities, FX, and things that are NOT price sensitive, OEICs
94
What is S.19 of FSMA. Who is exempt? What are the penalties?
Breach of general prohibition - carrying out activities without being authorized. Local authority
Magistrate: 6 months and 5000,
Crown: 2 years and unlimited
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Who can call an inspection by BEIS?
-own initiative
-200 members with 10% holdings
-the company itself with ordinary resolution
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When is a warning notice issued?
After investigation but before response to RDC
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Who requires to be regularly vetted to be fit and proper
Senior manager: so non-execs
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Who is in the FCA governing functions
CEO. executive director, audit committee
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Who si the the required function
Compliance and MLRO
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What is in the SYSC function
CFO CRO COO
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Does PRIN apply to all firms?
Yes to all authorised firms. PRA firms need to follow additional
-apply to all clients generally
-except if its PRIN 6 and 9 only for customers
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How many prescribed responsibilities given to senior managers at core firms?
5 usually, 6 for authorised fund managers
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What are not regulated activites
Newspaper, television
DPB if not separately remunerated
Trustees if not separately remunerated
Employee share scheme
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Who is covered under the Certification function
CASS oversight, prop trading, dealing with clients, material risk-taking,
their supervisors and managers
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Is Executive Director part of the Senior Manager Function?
Yes for FCA, no for PRA
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What function is investment adviser
Certification function
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What does the MAR concern?
the effect of the behavior
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What is excluded from scope of MiFID
The use for commercial purposes ie to hedge exposure
-no pension related
-no spot FX
-no bank deposits
-no tangible property
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What is not a core or ancillary MiFID function
commodity derivatives used by commodity users or producers
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Which notices can be posted without consent of party
Final decision and final supervision
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Who DECIDE TO TAKE ACTION AGAINST AUTHORISED FIRM?
FCA investigates, RDC decides
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What are funeral plans?
Retail savings. They are specified investments but not designated investments
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Is a company dealing as principal only for themselves considered an investment business under the FSMA 2000?
Yes, even market makers
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Is underwriting core or non-core?
Is receipt and transmission core or non-core?
Underwriting is core. Services related to underwriting is ancillary
Receipt and transmission is core
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What is FCA's general approach to supervision of authorised firm?
Outcome-focused
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What is absence of holding out?
Firms that deal on their own account (e.g. market maker) need to be authorised
But individuals/firms that deal on their own behalf for profits are exempt
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Designated Investments
TBH: Just remember what are NOT included
C P F S O P
CIS, Pension, Futures, Shares, options, P2p
What are not included: Insurance, funeral, mortgage, deposits, emoney, emissions, lloyds
118
DIB
Same: Just remember what are NOT included
M A A D M O
Manage, arrange, advise, deal, MTF, OTF
Police Car Drives Away
Pension, CIS, Dematerialised instructions, Administer investments and insurance
**NOT included*
Deposits, e money, insurance, mortgage, lloyds, funeral, benchmark setting
119
Who does not need to be authorised? (excluded)
-operate employee share scheme
-representative of another party
-not separately remunerated
-overseas person not in the UK
120
Who are exempt person?
-RCH and RIEs
-Appointed representatives
-DPB
121
What is the new consumer duty?
-new principle: deliver good outcomes for a retail client
122
What is a certified function
Falls under the SM&CR umbrella:
Firms must regularly vet the fitness and propriety of employees within firms who could pose a risk of significant harm to the firm or clients
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Exceptions to financial assistance
-not main purpose of transaction
-loan made to employees as part of employee share scheme
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Who prosecutes for insider dealings?
FCA, CPS, BEIS
FCA can do both CJA and MAR
125
Defences for insider dealing?
Did not expect profit
Sufficiently disclosed
Would have acted the same without
Market Maker
Market information
Price stabilisation
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Who are exempt from MiFID
Commodity producers and trader, employee schemes, any insurance, etc.
127
How long does money laundering record have to be kept for
5 years
