Chapter 1 Flashcards
State which one of the FCA’s 11 principles for businesses T&C procedures most apply to.
Principle 3
A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.
Identify 3 main groups of employees that are covered by T&C requirements in some way.
1) Advisers and supervisors
2) Overseers if specified back-office functions
3) All other staff (competent employee rule).
List the 7 key sections in the FCA T&C rules and guidance.
Training Needs Assessment of competence Qualifications Maintaining Competence Supervisors Record Keeping Notification Requirements
Outline the 2 FCA T&C rules relating to a firms training procedures.
1) They require firms to determine the training needs of individuals at appropriate intervals (ongoing basis)
2) They require firms to address any training needs that are identified and to ensure that the training is ‘timely, planned, appropriately structured and evaluated’.
Under the FCA notification procedures, give 5 examples of when the FCA may require a firm to notify them about an adviser
1) An adviser is no longer considered competent
2) An adviser fails to obtain an appropriate qualification within the proscribed time limit
3) An adviser fails to comply with a statement of approved persons/SM&CR conduct rules
4) An adviser who performs an activity before demonstrating competence and without supervision.
5) An adviser who fails to complete appropriate continuing professional development.
List the areas where a further exam is required beyond the Level 4 exam requirements
1) Occupational pension transfers and opt-outs
2) Broker funds
3) Long-term care insurance
4) Lifetime mortgages/Home reversion plans
5) Regulated mortgage contracts
A supervisor of a trainee investment adviser must satisfy four requirement proper to acting in this role. State what these are.
Pass the full appropriate qualification
Have relevant technical knowledge
Demonstrate assessment skills
Demonstrate coaching skills
What 5 areas does the T&C arrangements that are currently in force, impact upon?
Investment Advisers
Mortgage Advisers
General Insurance or Protection Advisers
Anyone who supervises the above
Overseers of specific back-office functions
What are the FCAs 3 operational objectives?
Consumer Protection
Integrity
Competition
What are the FCA Principles for business?
Conduct business with integrity
Due skill, care and diligence
Management, systems and control
Financial prudence/adequate financial resources
Observe proper standards of market conduct
Fair outcomes for customers
Communication is clear, fair and not misleading
Conflict of interest must be managed
Suitability of advice
Client assets must be adequately protected
Relations with the regulator must be open and cooperative
Which FCA principles are most likely to apply during the regulated advice process?
Conduct business with integrity
Due skill, care and diligence
Management, systems and control
Fair outcomes for customers
Communication is clear, fair and not misleading
Suitability of advice
What are the 3 main elements of the SM&CR?
Senior Managers
Certification Regime
Conduct Rules
What is the FCA definition of risk?
The possibility of financial loss, injury, disadvantage or destruction
What 3 categories of staff do the FCA T&C rules cover?
Those who:
Provide insurance, mortgage and investment advice
Supervise Advisers
Oversee some, specified back-office functions
What 3 areas of insurance and financial services activities does the FCA regulate?
Investments
General Insurance Products
Residential mortgages
