3.5: FCA BUSINESS STANDARDS Flashcards
What are examples of eligible counterparties? (4)
- Investment firms
- Insurance companies
- Credit institutions
- UCITS
For a ‘per se’ professional client: large MiFiD business firms should meet 2 of the following: (3)
- Balance sheet of 20m euros
- Net turnover of 40m euros
- Own funds of 2m euros
For a ‘per se’ professional client: large non MiFiD business firms should meet 2 of the following: (3)
- balance sheet of 12.5m euros
- net turnover of 25m euros
- 250 average number of employees for the year
For the quantitative test for becoming an elective counterparty, they must have: (3)
- have completed 10 significantly sized transactions per quarter
- portfolio worth 500,000 euros, inc. cash
- at least 1 year experience in financial industry
A firm may treat a client has an elective counterparty if it complies with point 1 and 3 and if applicable 2: (3)
- Qualitative test, client experience and knowledge
- Quantitative test
- Client understands consequences and consents
What does a client agreement cover? (2)
Terms of agreement
Information about firm and services
How long must a firm keep information about pension transfers promotions? (1)
Indefinitely
Examples of controlled activities/investments included in financial promotions: (5)
- Stakeholder pension
- Personal pensions
- Investments
- Cash savings
- Insurance
What is a direct offer financial promotion? (1)
An offer by the firm to enter into an agreement with the respondent
A firm should not make a cold call unless: (2)
- There is an existing relationship
- Is not a high volatile investment
How long should these records of financial promotions be held for: (4) MiFiD Business? Life policies? Pension transfers? Other cases?
5 years
6 years
Indefinitely
3 years
What is product governance? (1)
The creation and management of products throughout their life cycle
What is a PRIIP and give examples of this: (2)
Regulated funds like Qualified Investment Schemes
Alternative Investment Funds, private equity, hedghe funds
