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PCR > 3. Financial Services > Flashcards

3. Financial Services Flashcards

1
Q

General prohibition

A

19(1) FSMA

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2
Q

What is the general prohibition under 19(1)

A

Against carrying out regulated activity unless authorised or exempt

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3
Q

Where is ‘regulated activity’ for 19(1) defined

A

22(1)

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4
Q

What is a ‘regulated activity’ per 22(1) FSMA

A

Specified activity carried on by way of business and relating to specified investment

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5
Q

What part of what document covers specified investments

A

Part III RAO

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6
Q

What part of what document covers specified activities

A

Part II RAO

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7
Q

Some examples of specified investments under Part III RAO

A

Cs of insurance, shares, instruments creating indebtedness and RMCs

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8
Q

Where are RMCs defined

A

61(3)

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9
Q

What is an example of an instrument creating indebtedness

A

Bonds

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10
Q

What is an example of some specified activities under Part II RAO

A

Dealing in investments as principal, arranging/managing investments, safeguarding + administering investments, and advising on merits

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11
Q

What is an example of when a solicitor may be dealing in investments as an agent

A

Power of Attorney

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12
Q

When might solicitor be considered to be managing investments

A

Exercising discretion over investments

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13
Q

Is it a specified activity under Part II RAO if S only safeguarding investment - not administering

A

No

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14
Q

What is not considered to be ‘advising on merits’

A

Only giving generic advice/info

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15
Q

What do you need to be ‘advising on merits’ under Part II RAO

A

Opinion + recommendation

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16
Q

What to do after finding out activity and instrument are specified

A

See if regulated activity is excluded

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17
Q

Where to look first for exclusions of regulated activities

A

Specific exclusions in same part, then look for cross-references

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18
Q

Three general exclusions to regulated activities

A

66, 67 and 70

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19
Q

Article 66 RAO exclusion covers what?

A

Acting as T/PR

20
Q

Article 67 RAO exclusion covers what?

A

RA necessary part of other services

21
Q

Article 70 RAO exclusion covers what?

A

RA in connection w/ sale of body corporate

22
Q

What must you be careful of when applying Article 66 as an exclusion

A

Specific conditions apply based on activity - e.g. for Article 25, S must = co-T/PR

23
Q

When does Article 67 exclusion NOT apply

A

If remunerated separately from service to which it is necessary

24
Q

What is considered to be ‘necessary’ for Article 67 to apply

A

Other, main service is impossible without that service

25
Q

What is considered to be a ‘sale of a body corporate’ for Article 70 RAO exclusion to apply

A

If purchasers are buying 50%+ of shares, or acquiring day-to-day control

26
Q

Who can S refer client to and in order for them to do what, in order for RA to be exempt

A

To an authorised person either to deal through AP, or arrange deals through them

27
Q

When does the exemption of referring client to AP not apply

A

If commission received by S w/o accounting to client

28
Q

What kind of activities do many exemptions NOT apply to?

A

Insurance mediation activities

29
Q

What are ‘insurance mediation activities’?

A

Cs of insurance

30
Q

What shows that a particular exemption does not apply to insurance mediation activities

A

‘Subject to Article 4(4A)’

31
Q

If FSMA applies, what happens?

A

S must be directly authorised and comply w/ FCA Handbook, or be supervised by DPB (SRA)

32
Q

What two frameworks apply to dodge direct authorisation and alternatively be supervised under FSMA

A

327 FSMA and SRA Scope Rules

33
Q

Rules under 327 FSMA

A

Member of profession, no commission w/o accounting, SA incidental and S complies w/ SRA Scope Rules

34
Q

SRA Scope Rule 4 requires what

A

Activity arises out/complimentary, incidental and account for any pecuniary advantage

35
Q

What is considered ‘complementary’ under SRA Scope Rule 4

A

Not separate fee quote nor undertaken in isolation - arises naturally

36
Q

What is considered ‘incidental’ under SRA Scope Rule 4

A

RA only small part of firm and not conducted in isolation

37
Q

What is the rule on commission under SRA Scope Rule 4

A

Client has right to commission, but can give informed consent for firm to keep

38
Q

What must S also consider if SRA Scope Rule 4 + 327 apply?

A

Additional restrictions under Scope Rule 5

39
Q

Four key further restrictions under SRA Scope Rule 5

A

RIPs, PPSs, securities and IMAs

40
Q

What is included in RIPs per SRA Glossary

A

Life insurance policies

41
Q

What can S do in the case of RIP to ensure client not relying on firm as to merits

A

Send client written confirmation (Rule 8 SRA CoB)

42
Q

What is a security under SRA Scope Rule 5.3?

A

Shares

43
Q

What is a CBI under SRA Scope Rule 5.3?

A

Insurance C, option and futures

44
Q

What can S not do under Scope Rule 5.3?

A

Recommend client individual to buy/subscribe for security/CBI

45
Q

What is an IMA under SRA Scope Rule 5.6?

A

Cs of insurance or life policies

46
Q

What is the restriction on IMAs under SRA Scope Rule 5.6?

A

Firm cannot deal/arrange IMAs unless on FCA Register, appoint XO and comply w/ SRA CoB Rules

47
Q

Even if 19(1) FSMA does not apply for whatever reason, what must S keep in mind in terms of their own expertise + P(4) BI of client

A

If they have necessary skills and competence (O(1.4 - 1.5))

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