The Regulatory Environment Flashcards
(43 cards)
Which of the following bodies oversees the macro-economic and financial issues that could cause instability in the UK?
Financial Policy Committee
Which one of the following statements concerning the Financial Policy Committee (FPC) is correct? The FPC meets
Quarterly and produces a biannual Financial Stability Report
Which of the following statements is NOT true of the Principles for Businesses?
They only apply to firms authorised by the FCA
Which ONE of the following is not one of the Principles for Businesses laid down for firms in the financial sector?
Prevention of money laundering
Which ONE of the following is a statutory objective of the FCA?
Securing an appropriate degree of protection for consumers
-protecting and enhancing the integrity of the UK financial system
- promoting effective competition in the interests of consumers
Which of the following Principles for Businesses requires firms to have appropriate risk management controls in place?
Management and control
Who is responsible for the regulation of individual savings accounts (ISAs)?
HMRC
Which of the following is responsible for funding the FCA
Authorised firms
The FCA has the right to demand that firms maintain a higher capital requirement than that stated in their prudential standards. In terms of the tools of supervision this would be an example of what tool?
This would be an example of the FCA remedying the situation through their action
Which of the following statements are correct?
The FCA is responsible for ensuring consumers get a fair deal
The FCA is responsible for stability of the markets
The PRA is responsible for ensuring consumers get a fair deal
The PRA is responsible for stability of the markets
The FCA is responsible for ensuring consumers get a fair deal
The PRA is responsible for stability of the markets
Who regulates banks?
The PRA is the regulator - it is part of The Bank of England.
According to the Financial Services Act 2012, which one of the following is a statutory objective of the FCA?
Strategic objective: ensuring that the relevant markets function well
Operational objectives are the following: securing an protection for consumers, protecting and enhancing the integrity of the UK financial system, promoting effective competition in the interests of consumers.
The Financial Conduct Authority is funded by contributions from which of the following?
the FCA is answerable to the Treasury, it is in fact a limited liability company. It is also funded by the financial services industry - businesses authorised under the FSMA 2000
Which of the following is not one of the Principles for Businesses?
Senior management functions are regulated via the Accountability Regime (SM&CR), not the Principles for Businesses
Which of the following concerning general guidance issued by the FCA is not true? Guidance notes
Guidance notes are not binding on the firm and need not necessarily be followed to achieve compliance with the associated rule.
Membership of the Chartered Institute for Securities & Investment (CISI). requires compliance with the CISI’s own Code of Conduct. Which of the following outlines Principle #4 under the description of ‘Respect for Market Participants’?
Conduct number 4 is: Respect for Market Participants – to treat all counterparties and business partners with respect, to observe proper standards of market integrity, good practice, conduct and confidentiality required to maintain the highest level of mutual trust.
Which of the following is NOT true of the Fair Treatment of Customers (FTOC) regime implemented by the FCA?
Once implemented the firms have achieved their objectives.
FTOC only applies to firms that are out-of-scope of the Duty
Which of the following activities would be ‘out of scope’ under the FCA’s Consumer Duty initiative?
Providing group life assurance products is specifically excluded under the Consumer Duty, whether to employees of a company or to anybody else.
The other three activities are all, either directly or indirectly, provided to retail customers
Under the Financial Services Act 2012, which of the following is NOT a statutory objective of the Financial Conduct Authority?
Reducing financial crime
The Consumer Rights Act 2015 gives the FCA the power to do which of the following
The Consumer Rights Act 2015 allows the FCA to challenge unfair terms in financial services consumer contracts.
The Financial Services and Markets Act 2000 gives the FCA the power to do the other options
The FCA is granted the power to enforce their rules and sanction and discipline those who do not follow them. Which of the following would the FCA not seek disciplinary action for?
A firm may choose not to follow FCA guidelines (on cold calling hours for example) but failure to comply with rules and principles is an offence
Which of the following statements about the Financial Conduct Authority is FALSE?
The board of the FCA can delegate its statutory objectives to another body
The purpose of the Competition and Markets Authority is to ensure healthy competition between companies for the benefit of whom?
Consumers and the economy
The FCA guidance on electronic communication with a client states that a firm should do all of the following, except
Be able to demonstrate that it made it clear to the client that instructions communicated in this manner may not be acted upon immediately
