Chapter 1

Question 1

Exempt persons

Answer 1

Appointed representatives 
RIEs
RCHs
Miscellaneous Exempt Persons
Member of Lloyd’s and the Professions (lawyer, accountant, surveyor, actuary)

Question 2

FCA’s strategic objective of FSA2012

Answer 2

Ensure that the financial markets work well

Question 3

FCA’s operational objectives FSA2012

Answer 3

Consumer protection
Integrity
Competition

Question 4

PRA and FCA powers

Answer 4

Grant authorisation to persons applying for Part 4A permission
Supervise authorised persons on ongoing basis
Employ disciplinary measures
Enforce regulatory framework

Question 5

Squeeze Out

Answer 5

Bidder offered to acquire all shares in company, acquired 90% of shares and voting shares, the remaining shareholders must sell their shares at the price of original takeover offer

Bidder must give shareholders notice within 3 months of the last date on which offer can be accepted or 6 months if earlier

Question 6

Sell out

Answer 6

Acquirer buys 90% of shares, the remaining shareholders and oblige the acquirer to buy the remaining shares (sell out of the remaining shareholders)

Question 7

Pre-emption rights

Answer 7

Whenever a company issues new equity shares wholly in exchange for cash, must offer these shares in the first instance to their existing shareholders pro rata to their existing shareholding in that company

Question 8

Disapplication of pre-emption rights by listed companies

Answer 8

If public company wishes to issue new shares on a non pre-emptive basis (to new shareholders), must obtain shareholder approval for the disapplication of preemption rights.
Granted by way of special resolution at either AGM or at GM. 14 days notice required for GM

Question 9

POCA2002

Answer 9

Money laundering related to criminal property arisen from criminal conduct

Question 10

SOCPA2005

Answer 10

If it was not criminal in the country it happened

Question 11

Terrorism ACT 2000

Answer 11

Law relating to the financing of terrorism

Question 12

Counter terrorism act 2008

Answer 12

Terrorist financing and money laundering. Giving HMT new powers to direct firms in the financial sector to take certain actions

Question 13

Criminal Finances Act

Answer 13

Companies and partnerships criminally liable if they fail or prevent tax evasion by either member of their staff or external agent

Question 14

FCA SYSC Sourcebook

Answer 14

Obligation of senior management in implementing the AML provisions

Question 15

JMLSG

Answer 15

Good practice in countering money laundering and give practical assistance in ML regulations.
Publication of industry guidance

Question 16

Insider trading

Answer 16

Criminal offence under CJA:

Deal in price affected securities when in possession of inside information
Encourage someone else to deal in price sensitive securities when in possession of inside information
Disclose inside information other than in proper performance of employment

Question 17

S89-95 of FSA2012 - misleading statement

Answer 17

S89 - making false or misleading statements
S90 - creating false or misleading impressions
S91 - making false or misleading statement of creating false impressions in relation to specified benchmarks (LIBOR)

Question 18

Offences of misleading information

Answer 18

FCA has power to prosecute these offences.
S89-91 max 7 years in prison and unlimited fine at Crown court
Or 6 months prison with £5000 fine at magistrates

Question 19

MIFID

Answer 19

Applies in relation to:
Transferable securities, money market instruments, UCITS, derivatives relating to securities currencies yields, commodity derivatives, CFDs