Unit 5 - Uk Regulatory Infrastucture (6 of 80) Flashcards
(44 cards)
Who does the PRA regulate? (4)
Banks and building societies
Credit unions
Insurers
Systemically importand investment firms
What does the FCA regulate? (3)
Conduct across the whole financial services,
Market supervision
Prudential supervision of firms not supervised by PRA
Who established the FPC and what is its role?
Bank of England
Macro-prudent regulation (the stability and resilience of the whole financial system
What is the primary role of the PRA?
to contribute to the promotion of the stability of the UK financial system through the micro-prudential regulation of banks etc
What is the secondary objective of the PRA?
‘facilitate the international competitiveness of the UK economy and its medium to long-term growth (subject to international standards)’
What is the relationship between the PRA and BoE?
Following the entry into force of the Bank of England and Financial Services Act 2016, the PRA status changed from being a subsidiary of the BoE to being part of the bank.
What is the single strategic objective of the FCA?
to ensure that the relevant markets are functioning well
What are the 3 operational objectives of the FCA?
1) protect consumers from bad conduct (protect consumers)
2) protect the integrity of the UK financial system (market stability)
3) promote effective competition in the interests of consumers (effective competition).
How does the FCA view “credible deterrence”?
using enforcement as a regulatory tool – selecting cases to enforce against to send a strong and clear message to other firms not to engage in wrongful activity
Who is the auditor of the FCA?
The National Audit Officer (NAO) with the power to carry out value-for-money reviews. HMT can also carry out economy, efficiency and effectiveness reviews
Who is the FCA directly accountable to?
HM Treasury
How does HM Treasury oversee the FCA? (4)
- HM Treasury has the power to appoint or dismiss the FCA’s board and chairperson.
- The FCA must carry out an investigation and report to HM Treasury if there has been a significant regulatory failure.
- Provide an annual report on progress.
- HM Treasury has the power to commission reviews and inquiries into aspects of the FCA’s operations.
What is the role of BoE in the economy?
in effecting economic policy, by being given the ability to set interest rate levels through its MPC
How is the FPC structured and how does it meet its objectives of market stability?
makes recommendations and gives directions to the PRA on specific actions that should be taken in order to achieve its objectives
What is the role of the Competition and Market Authority?
Its role is to promote competition for the benefit of consumers, both within and outside the UK
How does the CMA fulfil its role? (8)
1) investigating mergers
2) conducting market studies/investigationjs where there may be competition and consumer problems
3) investigating anti-competitive agreements breaches and abuses of dominant positions
4) bringing criminal proceedings against individuals who commit the cartel offence
5) enforcing consumer protection legislation
6) cooperating with sector regulators and encouraging them to use their competition powers
7) providing info to individuals/businesses about rights under competition/consumer law, and
8) provide advice, reporting and monitoring in relation to government subsidies.
What is the Information Commissioner’s Office (ICO) and which act does it enforce?
1) to uphold information rights in the public interest
2) promoting openness by public bodies
3) promote data privacy for individuals
Data Protection Act (DPA) 2018
What is TPR?
the UK regulator of work-based pension schemes
What is the purpose of the FOS?
to provide quick resolution of disputes between eligible complainants and their product/ service providers with a MINIMUM OF FORMAILITY, by an independent person
What is the relationship between the FOS/FSCS and FCA?
The chairperson and other directors of the FOS & FCSC are appointed by the FCA, but the terms of their appointment must be such as to secure their independence from the FCA. The FCA requires an annual report on both.
What is the role of the FSCS?
to provide a safety net for customers of financial services firms which become unable to repay them - If an authorised financial services firm becomes insolvent, the customers can make a claim under the FSCS for compensation
What is the role of the Upper Tribunal (Tax and Chancery)?
it UK-wide jurisdiction in tax cases and references against decisions of the FCA, PRA, TPR, HM Treasury and BoE
Which type of FCA decisions can be appealed?
1) Authorisation and permission
2) Penalties for market abuse
3) Disciplinary measures
4) Official listings
How does the PRA achieve its primary objective? (4)
1) ensuring that any firms that fail avoid significant disruption to financial services
2) emphasising resolution planning to permit orderly failure
3) cooperating closely with the FPC and the FCA to ensure macro- and micro-prudential regulation is aligned across the markets, and
4) working with the FCA and others to ensure the UK authorities have a strong voice in international policy making.
