Responsibilities And Approach To Regulaton Flashcards
The prudential regulation authority is part of:
The Bank of England
What are the 8 regulatory principles?
1 Efficiency and economy
2 Proportionality
3 Sustainable growth
4 Consumer responsibility
5 senior management responsibility
6 Recognising the differences in the
business carried out by different regulated persons
7 Openness and disclosure
8 Transparency
What does the FCA use to prioritise risks?
Using impact and probability analysis
What are the FCA taking into account when conducting a risk assessment?
Volume of transactions
Type of product being sold
Type of customer being dealt with
Likelihood and impact of the customer suffering financial disadvantage
How many categories of potential impact act does the PRA split firms into?
5 categories
What are the operational objectives of the FCA?
Protect consumers
Protect financial markets
Promote competition
What is the maximum penalty for someone found guilty of market abuse?
7 years imprisonment or an unlimited fine
What are the FCA’s three pillar supervision model?
- Proactive firm/ group supervision
- Event driven, reactive supervision
- Thematic approach
A firm is categorised as a fixed portfolio by the FCA, which of the three supervision strategies would they be subject to?
Pillar 1 - proactive firm / group supervision
A firm is categorised as a flexible portfolio by the FCA, which of the three supervision strategies would they be subject to?
Pillar 2 - event driven, reactive supervision and pillar 3 - thematic approach
What was created by the banking act 2009 to provide a tripartite authorities with a framework to deal with failing banks?
Special resolution regime
What are the objectives of the PRA?
Primary - To promote safety and soundness of the firms they regulate
Secondary - facilitate effective competition
What is the PRA’s objective which is specific to insurers?
To secure an appropriate degree of protection for those who are or may become policy holders
What two tools do the PRA use?
Regulation and supervision
What are the three characteristics of approach the PRA use?
Judgement based
Outcome based
Focused aim
Who oversees the PRA?
The Bank of England
Who oversees the financial policy committee?
Bank of England
What does the Prudential regulation committee do?
Considers the economic policy around competition, growth, competitiveness, innovation, trade and better outcomes for consumers
What is the FCA strategic objective?
To ensure relevant markets work well
What is the FCA operational objectives?
Protect consumers
Protect financial markets
Promote competition
Who does the FCA have to answer to?
The treasury so the chancellor of exchequer has overall responsibility on the financial market
If a firm has a disagreement with the FCA decision who can they appeal to?
Upper tribunal tax and chancery chamber
What is civil law?
Relates to the rights of an injured person
What is criminal law?
Related to the rights of the public and their safety
