Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

FCA Regulation > Regulation Chapter 1 > Flashcards

Regulation Chapter 1 Flashcards

1
Q

Bodies under FSMA 2000

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

FSMA 2000 was amended by…

A

the Financial Services Act (2012)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Structure of the regulators

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

HMT has the responsibility for…

A

HMT has the overall responsibility for the UK’s financial system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

HMT has the power to …

A
  • appoint or dismiss the FCA’s board and chariman
  • require the FCA to report annually
  • commission reviews and enquiries into the FCA’s operations
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How often does the FCA publish a report?

A

Annually

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

The BoE has the purposes of ….

A

2 main purposes:

  • Monetary stability: Monetary Policy Committee (MPC)
  • Financial stability: Prudential Regulatory Authority (PRA)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

The Financial Policy Committee (FPC) goal

A
  • “Identify, monitor, and take action to remove or reduce systematic risk”
  • Responsible for the BoE’s bi-annual Financial Stability Report (FRS)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Financial Policy Committee (FPC) responsibility with BoE

A
  • Responsible for the BoE’s bi-annual Financial Stability Report (FSR)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How often does the Financial Policy Committee (FPC) meet?

A

4 times per year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

The Financial Policy Committee (FPC) lies between….

A

the BoE and the HMT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

FCA and Prudential Regulation Authority (PRA) roles

A

FCA:

  • overseen by treasury
  • replaced the FSA
  • Oversees conduct regulatrion of dual-regulated firms

PRA

  • originally a subsidiary of the BoE, but because of Financial Services Act 2016, it is now part of the BoE
  • Not accountable to any UK government body
  • given powers under the Fincancial Services Act 2012 amendments to FSMA 2000
  • oversees prudential regulation of dual-regulated firsm
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Statutory Objectives of FCA and PRA

A

FCA: (4)

Strategic (1)

  • ensure that relevant markets function well

Operational (3)

  • CONSUMER PROTECTION
  • INTEGRITY
  • COMPETITION

PRA (1)

  • promoting safety and soundness of PRA-authorised firms
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

FSMA empowers regulators to….

A
  • make rules that are LEGALLY BINDING on authorised firms
  • GRANT AUTHORISATION
  • SUPERVISE
  • employ DISCIPLINARY MEASURES and sanctions to punish or limit activities
  • generally ENFORCE the regulatory framework
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

FCA’s 11 Principles for Business and Fair Treatement

A
  1. INTEGRITY
  2. SKILL, CARE AND DILIGENCE
  3. MANAGEMENT AND CONTROL (- organise and control affairs responsibly and effectively. - adequate risk management systems)
  4. FINANCIAL PRUDENCE (adequate financial resources)
  5. MARKET CONDUCT (no market manipulation etc.)
  6. CUSTOMER’S INTEREST (TCF)
  7. COMMUNICATIONS WITH CLIENTS (clear, fair, and not misleading)
  8. CONFLICTS OF INTEREST (manage them fairly. Between firm and customer, or customer and customer)
  9. CUSTOMER RELATIONSHIPS OF TRUST (ensure suitability of advice)
  10. CLIENTS’ ASSETS (adequate protection for clients’ assets)
  11. RELATIONS WITH REGULATORS (deal with regulators in an open and co-operative way)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Differences Client and Customer

A

Client > Customer

client: retail, professional, and eligible counterparties
customer: retail, and professional

17
Q

Six customer outcomes for TCF

A
  • products and services marketed meet the needs of identified customer groups
  • advice is suitable
  • consumers are provided with clear information and kept informed
  • products perform as the firm led customers to
  • consumers do not face unreasonable post-sales barriers (they can change their minds)
  • fair treatment is central to the corporate culture
18
Q

Senior Management Arrangements, Systems, and Controls (SYSC) sections fo the FCA handbook has the purpose of …

A
  • encourage directors and senior managers to take RESPONSIBILITY for their firm’s arrangements
  • amplify PRINCIPLE 3 (management and control)
  • create a common platform of organisational systems and controls
19
Q

Senior Management Arrangements, Systems, and Controls (SYSC) sections fo the FCA handbook has the general requirements (SYSC 4) of …

A
  • sound governance (clear organisational structure)
  • senior personnel (must receive at least annual reports on compliance and internal audit)
  • apportionment of responsibilities (clear apportionment)
20
Q

The Senior Managers and Certification Regime (SMCR) applies to….

A
  • banks
  • building societies
  • credit unions
  • dual-regilated firms
  • all FMSA-authorised persons
  • insurers
  • insurance intermediaries
  • investment managers
  • asset managers
  • IFAs and consumer finance firms
21
Q

2 categories of controlled functions

A

SIGNIFICANT INFLUENCE (governing or managerial roles) (has more 4 types: governing functions, required functions, systems and conrols functions, significant management functions)

CUSTOMER (involving interation with customers of the firm) e.g. fund managers, traders, investment advisors

22
Q

The Approved Persons Regine Statements of Principle define ……

A

how an approved person should behave when carrying out a controlled function

23
Q

Statements of Principle list

A

1-4 are for all approved persons

  1. act with INTEGRITY (1 in principles of business and fair treat..)
  2. acti with due SKILL, CARE, and DILIGENCE (2)
  3. observe PROPER STANDARDS OF MARKET CONDUCT (5)
  4. deal with the REGULATORS IN AN OPEN AND CO-OPERATIVE way (11)

additional 3 for Significant Influence Functions (SIF) roles

  1. ensure that the business of the firm is ORGANISED so that it can be controlled effectively (including: reporting lines, authorisation levels and job descriptions, and suitability of individuals).
  2. exercise due SKILL, CARE, and DILIGENCE in MANAGING (like 2 above) the business of the firm
  3. ensure that the business of the firm COMPLIES with the relevant requirements and standards of the regulatory system (competent and adequately staffed compliance department)
24
Q

CISI Code of Conduct Principles

A

Apply only to CISI members

  1. act HONESTLY and FAIRLY at all times
  2. act with INTEGRITY
  3. observe applicable law, regulations and professional CONDUCT STANDARDS
  4. observe standards of MARKET INTEGRITY, GOOD PRACTICE, and CONDUCT required by participants in the market
  5. MANAGE fairly and effectively any relevant conflict of interest, making disclusure where required by law or regulation or your employer
  6. attain and maintain a level of PROFESSIONAL COMPETENCE appropriate to your responsibilities
  7. DECLINE to act in any matter in which you are NOT YET COMPETENT
  8. uphold the highest PERSONAL STANDARDS, including rejecting short-term profits in the jeopardise your reputaiton
25
Q

what would a CISI member do if asked to do something contrary to the principles?

A
  • discuss concerns with line amanger
  • seek advice from compliance
  • approach firms non-executive directors or audit committee
  • (having exhausted all internal avenues), contact the CISI for advise
26
Q

provisions within sourcebooks letters

R

E

G

D

UK

EU

P

C

A

Rules - binding on firms

Evidential provisions - evidence of compliance with a binding rule. not binding in its own right

Guidance - explanatory material. not binding

Directions - binding on those to whom they address (

UK legislative material

EU legislative material

P Statements of Principle (card on this too)

Conduct - behaviour that is not market abuse

27
Q

Pensions Regulator

A

regulator for work-based pension schemes

28
Q

the Competition and Markets Authority (CMA)

A

ensures healthy competition between UK companies

it is under the Enterprise Act

  • CMA investigates markets
  • if concerned, does in-depth investigation

FCA Regulation (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions