Core Regulatory Principles And Rules

Question 1

What is the maximum compensation the Financial Ombudsman service can award for complaints about firms that occurred after April 1st 2020?

Answer 1

£375,000.00

Question 2

If a new insurance company wants to be regulated, which governing body must they apply to?

Answer 2

PRA

Question 3

What does 4A permission set out in the FSMA refer to?

Answer 3

Applying to the FCA for direct authorisation to allow the firm to carry out the regulated activities they have applied for

Question 4

What is required in order for a firm to remain exempt status?

Answer 4

It must be contracted to an authorised person responsible for their activities

Question 5

What firms were automatically re-authorised?

Answer 5

Firms authorised under the Banking Act 1987, Insurance Companies Act 1982 and the Financial Services Act 1986

Question 6

What is an appointed representative?

Answer 6

Where a firm has exempt status as it has a contract with an authorised person who is regulated who has excepted responsibility for their activities

Question 7

What is an appointed representative?

Answer 7

Where a firm has exempt status and has a contract with an authorised person who has accepted responsibility in writing for their activities

Question 8

What important bodies are exempt from FCA regulations?

Answer 8

Bank of England
Local authorities
Various government bodies

Question 9

How often should a senior manager prove they are fit and proper?

Answer 9

Annually

Question 10

Who do conduct rules apply to?

Answer 10

Everyone employed by the firm apart from ancillary staff

Question 11

How many tiers of conduct rules are there and who do they apply to?

Answer 11

Tier 1 - apples to all
Tier 2 - apples to all senior managers only

Question 12

What are the tiers of firms?

Answer 12

Core, limited scope and enhanced

Question 13

If a principle terminates an AR (must be in writing) how many days do they have to notify the FCA?

Answer 13

They must notify the FCA within 10 days

Question 14

How long must records be kept?

Answer 14

Indefinitely for pension transfer / opt outs
5 years life and pensions
5 years most other dates
3 years non MiFID

Question 15

When must product providers report persistency to the FCA?

Answer 15

Annually for the first 4 years

Question 16

How often must firms submit reports on complaints?

Answer 16

Twice a year

Question 17

How many hours of CPD is required for an authorised person?

Answer 17

35 hours (21 must be structured)

Question 18

How many additional hours CPD for a pension specialist?

Answer 18

Additional 15 years

Question 19

A new entrant has _____________ to complete relevant exams.

Answer 19

48 months

Question 20

What is meant by the general prohibition?

Answer 20

It is an offence to carry out regulated activities unless authorised or exempt

Question 21

Are there any exempt bodies?

Answer 21

Yes, The Bank of England
Local Authorities
Various government bodies

Question 22

What is an approved person?

Answer 22

An individual approved to carry out a controlled function

Question 23

What are the three main categories of senior management functions?

Answer 23

Governing functions
Required functions
Systems and control functions

Question 24

What is money laundering?

Answer 24

The process for when criminals turn illegally obtained money into apparently legitimate funds

Question 25

What are the three stages of money laundering?

Answer 25

Placement Layering Integration

Question 26

What is the financial action task force?

Answer 26

The global money laundering and terrorist watch dog. Uk and other countries come together to fight financial crime

Question 27

What directives came into place to combat money laundering and introduced joint money laundering steering group guidance?

Answer 27

4th & 5th money laundering directives

Question 28

When does a credit check need to be carried out?

Answer 28

When establishing a new business relationship Carrying out occasional transactions money laundering suspicions Terrorist financing suspicions

Question 29

When may a simplified due diligence (SDD) check be carried out?

Answer 29

For low risk transactions

Question 30

When may a enhanced CDD check be required?

Answer 30

When someone is a potentially political exposed individual, person is not present, anyone from a high risk country

Question 31

What steps are included in the identification process?

Answer 31

Identify customer and Verify ID

Question 32

How does eIDV (electronic identity verification) work?

Answer 32

Matches client information imputed to details on a public database

Question 33

What is a SAR?

Answer 33

Suspicious Activity Report

Question 34

How often must a firm report review of AML systems?

Answer 34

Annually

Question 35

How long should records of clients ID be kept for?

Answer 35

5 years after end of client relationship or 5 years after the transaction

Question 36

If a firm has a serious data breach this must be reported to:

Answer 36

The Information Commissioner

Question 37

What is the maximum fine for a data breach is:

Answer 37

£17 / €20 or 4% of global turn over whichever is the largest

Question 38

How long does a firm have to settle a complaint?

Answer 38

8 weeks

Question 39

What is FOS’s aim?

Answer 39

To resolve disputes quickly and minimum formality

Question 40

To take a complaint to FOS what is the time frame?

Answer 40

8 weeks after initial complaint with firm Within: 6 weeks of last communication with firm 6 years after the event occurred 3 years after claimant was given a reason to complain

Question 41

How much compensation can FOS award?

Answer 41

£350,000 for complaints they can award more however firms are not obliged to pay more

Question 42

How much are the limits for compensation that can be paid by FSCS?

Answer 42

Deposits, investments, home finance and SIPP provider £85,000 Insured personal pension provider, long term insurance 100% no limit Intermediary insurance and general insurance 90%

Question 43

What do the pension protection fund do?

Answer 43

Compensate members for eligible BD schemes where a firm insolvent and unable to pay benefits

Question 44

Who are TPO?

Answer 44

The Pension Ombudsman mediator for pension complains

Question 45

Under the Money Laundering Regulations what does Customer due diligence encompass?

Answer 45

Customer due diligence must be carried out when a regulated firm begins a business relationship with the customer. The verification of a customer’s identity must be sought along with the nature of the business relationship

Question 46

If a regulated firm wants to move address when do they need to notify the FCA?

Answer 46

In advance of the address change