Chapter 1 Flashcards
What is the FCA’s main objective?
The FCA main objective is to ensure that the relevant markets operate well so that consumers get a fair deal.
What key elements are included in conduct & competence?
- SM&CR
- T&C
- SYSC
- Mifid II
- Code of ethic’s
What is meant by competence?
Competence is having the skills, knowledge and expertise. As well as a good ethical behaviour.
How long should most investment record be kept for?
Investment firm must keep records on most advice given for at least 5 years.
Pension transfer specialist training records must be kept indefinitely.
Who are subject to the conduct rules and which ones?
Senior Mangers Regime – 1st & 2nd tier conduct rules
Certification Regime – 1st tier conduct rules
Conduct Rules – all but ancillary staff.
What is covered by T&C rules and guidance?
- Training needs
- Competence
- Qualifications
- Maintaining competence
- Supervisors
- Record keeping
- Notification requirements
What are the code of ethics?
- Comply with the code and all relevant laws and regulations
- Act with the highest ethical standards and integrity
- Act in the best interests of the client
- Treat people fairly regardless of age, sex, disability etc
What are the 1st tier conduct rules
- You must act with integrity
- You must act with due skill, care & diligence
- You must be open and cooperative with FCA, the PRA and other regulators
- You must pay due regard to the interests of the customer and treat them fairly
- You must observe proper standards of market conduct
What are the 2nd tier conduct rules?
- You must take reasonable steps to ensure that the business of the firm for which you are responsible is controlled effectively.
- You must take reasonable steps to ensure the business of the firm you are responsible complies with the relevant requirements and standards of the regulatory system.
- You must take reasonable steps to ensure that any delegation of your responsibilities is to an appropriate person and that you oversee the discharge of the delegated responsibility effectively.
- You must disclose appropriately any information of which the FCA or PRA would reasonably expect notice.
What is the timescale for reporting suspected breaches on COCON for a senior manager?
Within 7 business days of the becoming aware of the actual suspected breach
What is the timescale for reporting suspected breaches on COCON for staff that are NOT a senior manager?
Reporting is on an annual basis in October – only suspicions that are either proven or remain open at the time of the reporting will need to be included – not those that have been investigated and found to be unfounded.
Any significant breaches still need to be reported when they become aware of them.
State the 5 elements of SYSC that have the most impact on competence and conduct.
- SYSC 3: Systems and Control
- SYSC 5: The competent employee rule
- SYSC 6: Compliance, internal audit and financial crime
- SYSC 7: Risk Control
- SYSC 9: Record Keeping
