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PLP > 6. PC, ML and FSMA > Flashcards

6. PC, ML and FSMA Flashcards

1
Q

What is a reg activity under 19(1)

A

22 FSMA states specified investments and activities

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2
Q

IB(1.25) says what

A

advises S ensures authority given to 3rd to instruct, if instructed by 3rd

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3
Q

When is it common for S to act for Lender and why

A

In residential, as usually no negotiation

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4
Q

What is a business relationship for Reg 28

A

Between RP + customer, out of RP business + BR expected to last

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5
Q

When should S not act, generally, under CoI (IBs)

A

If direct conflict, if negotiating on substance, or if parties unequal

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6
Q

What principle is triggered if given instructions from 3rd party

A

P(4)

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7
Q

What should you explain (in Q) when dealing w/ conflict between O(4.1) and O(4.2)

A

Why confidentiality is in BI of one party, and how it conflicts w/ disclosure and BI of other party

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8
Q

What Ps are relevant if mortgage fraud suspected

A

P(1) and P(2)

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9
Q

Three kinds of specified activity under Part II RAO

A

Arranging investment, advising on merits or investment, or merits of RMC

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10
Q

What is occasional transaction for Reg 28

A

Transaction carried out not as part of BR

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11
Q

Why is it generally impossible to act for Lender and Borrowr

A

Interest in end result is not the same

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12
Q

IB applying to residential transaction, acting for Lender and Borrower

A

IB(3.7)

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13
Q

When is S released from duty under O(4.1), to do with mortgages

A

If fraud suspected

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14
Q

What does explaining issue and obtaining written consent from clients for exception to 3.5 obtain

A

P(4)

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15
Q

Exception in O(3.7)

A

Competing for same objective

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16
Q

Reg on timing for CDD

A

Reg 30

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17
Q

What defines specified investments for 19(1) FSMA

A

Part III RAO

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18
Q

What is standard CDD under Reg 28

A

Requires identification and verification of customer identity and obtaining info on purpose of intended BR/OT

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19
Q

Two kinds of clients which might fall under O(3.6)

A

Acting for Buyer/Landlord and Seller/Tenant; or for Lender and Borrower

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20
Q

When can CDD be carried out later than before relevant transaction

A

During BR (ONLY BR), if necessary to avoid disrupting course of business, low risk, and ASAP

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21
Q

What exceptions apply when conflict between 4.1 and 4.2?

A

O(4.4), continue to act if can safeguard info, both give informed consent, and reasonable to act

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22
Q

O(1.3) says what?

A

Consider if can comply w/ CoC

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23
Q

Two Outcomes on own and client conflict of interest

A

O(3.4) and (3.5)

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24
Q

What is CML CoT

A

Certificate of Title for mortgage

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25
Q

When can a regulated activity be carried out, and not contravene 19(1) FSMA

A

If authorised or exempt

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26
Q

Where is the general prohibition under FSMA

A

19(1)

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27
Q

Why must you cease acting for 1 if conflict between 4.1 and 4.2

A

Cannot comply w/ CoC (per O(1.3))

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28
Q

What does specified activity under Part II RAO NOT include

A

Giving generic advice or only info - need opinion and recommendation

29
Q

Why is M of commercial property not covered by FSMA

A

Not a dwelling for RMC definition under 61(3)(a)

30
Q

Four elements to RMC

A

Lender provided credit, borrower is individual, obligation to repay secured as 1st legal M of land, and at least 40% to be used as dwelling

31
Q

Where are two exceptions to O(3.5)

A

O(3.6) and (3.7)

32
Q

What must M be for S to act for Lender and Borrower (under IB(3.7))

A

Residential, on standard terms, reasonable, CML CoT and in BI of both to act

33
Q

Outcome on exceptions to conflict between 4.1 and 4.2

A

O(4.4)

34
Q

When can S act for joint purchasers

A

If they hold as JTs

35
Q

What is a ‘relevant person’ for Reg 28

A

‘Independent legal professionals’

36
Q

Glossary definition of competing for same objective

A

Obtained by one = unobtainable by other

37
Q

Reg on what is CDD

A

Reg 28

38
Q

No authorisation needed for specified activity under Part II RAO unless what

A

Carried out in relation to specified investment

39
Q

What IB advises S ensures authority given to 3rd to instruct, if instructed by 3rd

A

IB(1.25)

40
Q

What must S do for exception to O(3.5) be relied upon

A

Explain issues + obtain written consent from clients

41
Q

For how long does duty of confidentiality last

A

Indefinitely, unless waived, allowed or overridden

42
Q

What defines specified activities for 19(1) FSMA

A

Part II RAO

43
Q

Outcome on confidentiality

A

O(4.1)

44
Q

O(1.2) says what

A

Must protect client’s interests

45
Q

When is CDD required under Reg 28

A

If relevant person establishes BR or carries out occasional transaction

46
Q

When can S act for A, despite holding material info on B

A

If info can be protected

47
Q

Where is RMC defined for Part II RAO

A

61(3)(a)

48
Q

When is CDD usually carried out

A

Before OT/BR

49
Q

Can Ss be liable if they receive laundered money, even w/o knowledge

A

Yes

50
Q

What IBs rule out substantially common interest

A

Possible prejudice, unequal bargaining, or end result differs

51
Q

What shows 4.1 takes precedence over 4.2

A

O(4.3)

52
Q

What happens if Borrower is lying on mortgage docs, and S acting for Borrower and Lender

A

O(4.1) takes precedence, so cease acting for Lender

53
Q

What is the procedure for money laundering

A

CDD required? What is CDD? Timing

54
Q

What outcome is triggered if instructions from 3rd

A

O(1.2)

55
Q

What does S disclose to Lender if must cease to act due to conflict between O(4.1) and (4.2)

A

Disclose only ‘professional reasons’

56
Q

Exception in O(3.6)

A

Substantially common interest

57
Q

How do you rule out the application of two exceptions to O(3.5)

A

By IB or glossary

58
Q

How to deal w/ conflict Q

A

Is there a conflict under O(3.5) per IBs or facts? Does exception apply? Consider Glossary + if IBs exclude

59
Q

Outcome on disclosure

A

O(4.2)

60
Q

Two kinds of specified investments in Part III RAO

A

Rights under Cs of insurance and under RMCs

61
Q

What happens if S instructed to deal w/ more than one prospective B (contract race)?

A

Inform all Bs + confidentiality duty applies so requires consent

62
Q

Why is it unlikely S can act for Lender and Borrower in commercial

A

Not residential, nor CML CoT under IB(3.7), and potential negotiation

63
Q

How is a substantially common interest defined in glossary

A

Clear common purpose + strong consensus on means, so conflict = peripheral

64
Q

Reg on if CDD required

A

Reg 27

65
Q

What is breach of 19(1) FSMA

A

Criminal offence

66
Q

Why is it rarely possible to act for Buyer/Landlord and Seller/Tenant

A

Interest in end result differs

67
Q

Why must you cease acting for client if O(4.2) cannot be met

A

Can no longer give standard of care under O(1.5), against P(4)

68
Q

What is it important to note about IB(3.14)

A

It applies if there is a TRANSFER FOR VALUE

PLP (12 decks)

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