Unit 2

Question 1

BOE responsibilities

Answer 1

Protecting & enchanting monetary & financial stability

Question 2

What does financial committee do

Answer 2

Identify risks that may threaten the stability as a whole

Question 3

Who does the PRA authorise

Answer 3

Large, systemically important providers banks and insurance companies

Question 4

Who are the FCA responsible for

Answer 4

Retail and wholesale firms

Question 5

FCA strategic objective

Answer 5

To make sure relevant markets work well so consumers get a fail deal

Question 6

What are the 3 operational objectives

Answer 6

Protect consumers, protect financial markets and promote competition

Question 7

Who is responsible for investigating mergers that could restrict competition

Answer 7

Competitions and markets authority

Question 8

What does conduct business sourcebook set out

Answer 8

Business standards (MCOBS, ICOBS, BCOBS)

Question 9

Who do principle of business conduct rules apply to

Answer 9

Individuals working in financial services apart from ancillary roles

Question 10

The new consumer duty principle 12 does not apply to who

Answer 10

Institutional investors, professional clients, eligible counterparties

Question 11

What is part 4a permission

Answer 11

To carry out regulated activities

Question 12

If a firm had taken disciplinary action against a senior manager how long should the firm report to FCA

Answer 12

7 days

Question 13

What is a fixed portfolio

Answer 13

Small number of firms with highest level of supervisory attention

Question 14

Flexible portfolio is

Answer 14

Lower level of risk and are supervised through a mixture

Question 15

Who does training and competence apply to

Answer 15

Financial advisers, supervisors of those advisers and supervisors who oversee back office admin functions

Question 16

What is capital adequacy

Answer 16

If a business runs into difficulties the business has sufficient capital to make it unlikely deposits will be at risk

Question 17

Solvency ratio is

Answer 17

Capital as a percentage of the risk adjusted value of assets

Question 18

What is it called if a business assets exceed its liabilities

Answer 18

Solvency

Question 19

What is the risk of loss as a result of failed internal processes people and systems

Answer 19

Operational risk

Question 20

If a firm calls themselves individual what must they offer

Answer 20

Offer one product but advise everything within that product

Question 21

What are real time promotions

Answer 21

Personal visits, telephone conversations

Question 22

What are non real time promotions

Answer 22

Written promotions, newspaper

Question 23

Timescale for issuing SR for investment advice to a retail client in case of life policies

Answer 23

Before transaction is concluded

Question 24

Timescale for issuing SR for personal pension/stakeholder where cancellations apply

Answer 24

No later than 14th day after the contract concluded

Question 25

Cancellation period for life and pension, insurance

Answer 25

30 days

Question 26

Cancellation period for investments

Answer 26

14 days

Question 27

Cancellation for mortgages

Answer 27

7 days

Question 28

Which type of mortgage is not regulated

Answer 28

Consumer buy to let

Question 29

What applies to just solely stakeholder products

Answer 29

Basic advice

Question 30

What is core investments

Answer 30

Clients with simple straightforward needs

Question 31

What did the FCA introduce for high cost short term credit

Answer 31

Interest and fees charged must not exceed 0.8% of the amount borrowed and default fees cannot exceed £15

Question 32

What does the financial action task force do

Answer 32

Co ordinate international fight against money laundering terrorist financing

Question 33

Under the proceeds of crime act 2002 what is the conviction for concealing, arranging

Answer 33

14 years imprisonment, unlimited fine or both

Question 34

What is the offence for failing to disclose and tipping off

Answer 34

Prison up to 5 years unlimited fine or both

Question 35

Offence for partner/director failing to comply

Answer 35

2 years prison fine or both

Question 36

Who is the pension regulator responsible for

Answer 36

Regulation of work based pension schemes and personal pension schemes

Question 37

Who does MIFID apply to

Answer 37

Firms that provide services to clients in relation to tradable financial instruments

Question 38

Who does non MIFID apply to

Answer 38

Life assurance pensions and mortgages

Question 39

Who is the FPC a committee of?

Answer 39

The Bank of England

Question 40

Who are the PRA & FCS jointly responsible for

Answer 40

Financial compensation scheme FSCS and FCA is solely responsible for FCA

Question 41

Record keeping for non mifid business

Answer 41

Three years

Question 42

Record keeping for carrying out mifid business

Answer 42

5 years

Question 43

Record keeping for carrying out pension transfer business

Answer 43

Indefinitely

Question 44

What min solvency ratio does Basel III require banks to reach

Answer 44

10.5 %

Question 45

What is regulatory capital

Answer 45

The amount of capital that a bank is required to hold in order to meet regulatory requirements

Question 46

What is the liquidity coverage ratio aimed at

Answer 46

Ensuring a banks short term liquidity

Question 47

What is the aim of the net stable funding ratio

Answer 47

Long term financial resources exceed long term commitments