objectives of funds

Question 1

funds that aim to maximise returns

Answer 1

• defined benefit pension scheme
• collective investment scheme
• investment trust company

Question 2

funds that aim to meet liabilities

Answer 2

• defined benefit pension scheme
• life assurance company
• general insurance company

Question 3

types of fund : investment trust companies

Answer 3

venture capital trusts (VCT)
real-estate investment trusts (REITS)

Question 4

types of fund : insurance companies

Answer 4

general
life (pays fixed sum at death)

Question 5

legal status of a unit trust and ICVC/OEIC

Answer 5

trust and company

Question 6

type of fund for unit trust and ICVC/OEIC

Answer 6

open-ended CIS and open-ended CIS

Question 7

Asset management market review : Authorised fund managers must

Answer 7

• assess the value for money
• take corrective action if it does not offer good value of money
• explain assessment annually in public report

Question 8

Asset management market review : firms must consider

Answer 8

• quality of service
• fund performance
• authorised fund amanger costs
• economies of scale - and its savings
• comparable market rates
• classes of units

Question 9

CIS in EU are regulated by

Answer 9

units for collective investment in transferrable securities directive

Question 10

a UCITS can promote itself in europe if

Answer 10

obtains a UCITS passportf form home regulator
be open-ended
follows all UCITS regulations

Question 11

UCITS III

Answer 11

managment directive and product directive

Question 12

UCITS IV more regulatory

Answer 12

• improved ability to passport through mgmnt company passport with home state supervision and simplified regulator-to-regulator communication
• KIID
• Facilitated fund mergers and master-feeder structures

Question 13

AIFMD

Answer 13

• regulates (hedge) fund managers
• allows cross border EEA selling of funds if :
  obtained authorisation by regulator in EU
  outside EU if meet certain fiscal and regulatory requirements

Question 14

requirement for authorisation and reporting applies to AIFs

Answer 14

scope
- above 100mill euro if AIF uses leverage
- above 500mill euro if AIF does not use leverage

requirements
- provide annual reports
- reasonable leverage
- use only regulated brokers

Question 15

types of pension schemes

Answer 15

• personal private pension ~(stakeholder)
• occupational pension scheme ( defined benefit, defined contribution)
• pensions act 2008 (22yrs and earning above £10,000, NEST)

Question 16

Occupational pension scheme

Answer 16

• sponsoring company
• members/beneficiaries
• approval by HMRC (no income or capital gains tax liabilities)
• trustee (legal owner of assets)
• investment manager

Question 17

OPS statement of investment ppls

Answer 17

• type of investments
• risk and how risks will be managed
• realising investment
• whether and how any rights will be used

Question 18

OPS statement of investment ppls reviewed every

Answer 18

3 years

Question 19

scheme specific funding requirement

Answer 19

• included in statement of ppls
• trustees required to:
  prepare statement of funding ppls, explaining how objective will be met
  prepare schedule of contributions
  obtain regular actuarial valuations and reports
  recovery plan in place if objective not met

Question 20

pensions regulator objectives

Answer 20

• protect members of work-based schemes
• reduce risk of compensation claims
• promote gd administration in schemes
• maximise employers compliance
• empowered by pensions act 2004

Question 21

pension protection fund (PPF)

Answer 21

-compensation for members of eligible defined benefit pension schemes on insolvency
can provide:
- 100% benefit to existing pensioners
- 90% benefit to those not yet retired (cap £38k)
FUBNDED BY LEVIES ON eligible schemes

Question 22

insurance companies products

Answer 22

• term assurance (e.g. to pay mortgage. covers a specific period)
• whole of life (pays at death)
• endowment (sum assured on death or maturity)
• with profits (aims to pay a fixed return)

Question 23

pensions scheme act 2021 additional protections

Answer 23

[ guidance for trustees on pension transfers
- higher fines for avoidance of duties and info deficiencies - 1mill £
- governance disclosures on climate related risk and opportunities
- funded by compulsory annual levies on all eligible schemes

Question 24

AIF includes

Answer 24

hedge funds
private equity funds
retail investment funds
investment companies
real estate funds

Question 25

AIFMD

Answer 25

harmonization that creates permission for AIFM to market their funds under EU passport rather than comply to local regimes

Question 26

sub threshold AIFM

Answer 26

• small authorised UK AIFM (FCA authorised and has not opted into the AIFMD)
• small registered UK AIFM and either:
  
  • internal AIFM corporate body (investment trust)
  • unauthorized manager of property funds which are operated by an FCA authorised operator
  • fund manager that applied for Euroepean venture capital funds regulation or european social enterpreneurship funds regulation

Question 27

sub-threshold AIFMS APPLY

Answer 27

SYSC
COBS
but cannot benefit from EU marketing passport under AIFMD so marketing has to comply with local regimes

Question 28

AIFMD requires AIFMs to select brokers and counterparties that

Answer 28

• subject to regulatory supervision
• financially sound
• have necessary organisational sgtructure

Question 29

stakeholder pensions for

Answer 29

(low cost)
self-employed
middle-income employess

Question 30

powers of pension regulator

Answer 30

• investigate schemes (through scheme reutrn + reports of breaches from whistleblower + reports of notifiable events trustees and employers
• putting things right
• acting against avoidance

Question 30

powers of pension regulator

Answer 30

• investigate schemes (through scheme reutrn + reports of breaches from whistleblower + reports of notifiable events trustees and employers
• putting things right
• acting against avoidance