1 - The Regulatory Environment Flashcards
Which 2 securities are not specified investments under FSMA 2000?
-Tangible assets, such as real estate and commodities (excluding bullion)
-Derivatives used for risk management
Which body is responsible for regulating capital requirements of financial firms?
Prudential Regulation Authority (PRA)
What are the 4 main roles of government?
-Provide services the private sector won’t
-Regulate firms to protect the consumer
-Intervene in the distribution of income
-Stabilise the economy
When is the Regulatory Decisions Committee required to issue a statutory notice?
At the beginning of an investigation of an authorised firm or certified person
What must someone be to undertake investment business in the UK?
Authorised OR exempt
To who does the COLL sourcebook apply?
Directors and depositaries of ICVCs
Who are the 3 European supervisory authorities?
-European Securities and Markets Authority (ESMA)
-European Banking Authority (EBA)
-European Insurance and Occupational Pensions Authority (EIOPA)
What does Administering of investments cover?
Settlement
How is the FCA financed?
By authorised firms in the financial industry
What is the maximum penalty for unauthorised investment business?
2 years in jail and an unlimited fine
Which body makes significant decisions on disciplinary measures?
The Regulatory Decisions Committee (RDC)
What are the 3 main objectives of the Financial Services Action Plan (FSAP)?
-Create a single EU wholesale market
-Achieve open and secure retail markets
-Create state of the art prudential rules and structures of supervision
Who is the Tax and Chancery Chamber of the Upper Tribunal set up by?
The Ministry of Justice
What is ESMA’s main power?
Investigating non-compliance with EU law
What are the 3 pillars of FCA supervision?
-Firm systematic framework
-Event-driven work
-Issues and products
When considering a risk assessment under the Firm Systematic Framework, what key elements does the FCA consider?
Interests of consumers and market integrity
What 4 requirements does the Common Reporting Standards (CRS) set out?
-The financial account information to be exchanged
-The financial institutions required to report under the Standard
-The different types of accounts and taxpayers covered
-Common due diligence procedures to be followed by financial institutions
Where would a firm find guidance on the necessity and process of authorisation for conducting regulated activities?
Perimeter Guidance Manual (PERG)
A per the ‘turnover test’ what is the minimum turnover level for the CMA to investigate a merger?
£70m
What are the 3 main CFA Institute Standards of Professional Conduct?
-Professionalism
-Duties to Clients
-Responsibilities as a CFA Institute Member or CFA candidate
Which body of the Bank of England is responsible for protecting and enhancing financial stability?
Financial Policy Committee
Which regulatory body is responsible for overseeing the systematic infrastructure of central counterparties, securities settlement systems, and recognised payment systems?
Bank of England
