Ch 10 Statutory Regulation

Question 1

Who is responsible for regulating the UK’s financial services industry?

Answer 1

Financial Conduct Authority (FCA)
Prudential Regulation Authority (PRA

Question 2

Responsible for monitoring emerging risks to the UK financial system as a whole and providing overall strategic direction for rhe entire regulatory regime

Answer 2

FINANCIAL POLICY COMMITTEE (FPC)

Question 3

PRC operates alongside the other 2 Bank committees

Answer 3

1.FPC and MPC (Monetary policy committee)

Question 4

Who is responsible for conduct of business and market issues for all firms including insurers, and prudential and prudential regulation of small firms (e.g insurance brokers and financial advisory form)

Answer 4

FCA ( financial conduct Authority )

Question 5

What is the primary objective of the Prudential Regulation Authority?

Answer 5

1.Promote the safety and soundness of the firms it regulated

2.Specific to insurance firm,to contribute to ensuring that policyholders are appropriately protected

Question 6

It’s primary or secondary objective of PRA

Answer 6

To facilitate effective competition in the markets for service provided by PRA authorised firms

Question 7

What is threshold conditions

Answer 7

Are the minimum requirements that firms must meet in order to be permitted to carry on regulated activities

Question 8

What are the PRA’s threshold conditions?

Answer 8

A firms head office and “mind and management” must be in the UK

The firm to conduct business “in a prudent manner” and maintain the “appropriate financial and non financial resources

The firm to be “fit and proper” and appropriately staffed

The firm is capable of being effectively supervised

Question 9

Risk assessment framework capture 3 elements

Answer 9

1.Potential impact
2.macroeconomic and business risk
3.Mitigating factors

Question 10

What is the PRA’s framework called and what is it based on?

Answer 10

The Proactive Intervention Framework, made up of five stages based on the PRA’s judgement about the firm’s proximity to failure

Question 11

Dual regulated firms

Answer 11

Society of Lloyd’s and Lloyd s management agents

Question 12

FCA regulated firms

Answer 12

Lloyd’s members agent and Lloyd’s brokers

Question 13

What is the PRA’s framework called and what is it based on?

Answer 13

The Proactive Intervention Framework, made up of five stages based on the PRA’s judgement about the firm’s proximity to failure

Question 14

Who expects insurers to have a culture that supports their prudent management.

Answer 14

PRA (Prudential Regulation Authority )

Question 15

all individuals working in an insurance Co should have what kind of management

Answer 15

Good prudential management

Question 16

Who is a lead regulator of Lloyd’s as a whole

Answer 16

PRA (Prudential Regulation Authority )

Question 17

Fca is allowed to use its product intervention powers in relation to which customers

Answer 17

Retail Customers

Question 18

Common power available to FCA and PRA

Answer 18

Publish the fact that a warning notice had even issued about a firm as making a summary of the notice publicly available.

Question 19

What is the FCA and PRA business handbook called ?

Answer 19

PRIN - Principles of Business

Question 20

Annually FCA is required to report to

Answer 20

Government and Parliament

Question 21

By whom FCA work is overseen

Answer 21

By a board appointed by the government with a majority of non executive directors

Question 22

Requirement for FCA in the event of a regulatory failure

Answer 22

To make a report to the treasury about the event of a regulatory failure and where this failure was due to the FCA s actions.

Question 23

What is the minimum amt of PI cover for a single claim that the FCA requires intermediary firms to have

Answer 23

Euro 1,300,380

Question 24

Under solvency II, insurance cos must maintain enough capital to give them what level of confidence that they are able to cover their liabilities in the following 12 months

Answer 24

99.5%

Question 25

Which UK regulator would authorise a new insurance Co

Answer 25

The prudential regulation Authority ( PRA)

Question 26

What specific measure is uses to assess the financial strength of an insurer

Answer 26

Solvency margin

Question 27

Under the certification regime, who determines teh fitness and propriety of an individual

Answer 27

The authorised firm

Question 28

What is the maximum penalty for someone found guilty of tipping off a suspected person under the criminal justice act 1993

Answer 28

5 years imprisonment

Question 29

An individual providing advice will need to follow the conduct of business of the

Answer 29

FCA

Question 30

Who is responsible in an authorised firm for ensuring adequate money laundering systems and controls

Answer 30

The money laundering reporting officer

Question 31

What is FCAs online system of monitoring authorised forms known as

Answer 31

GABRIEL

Question 32

Which UK organisation has overall responsibility for promoting fair competition for the nebefot of the consumer

Answer 32

Competition and Markets Authority