Chapter 1 T&C Rules Flashcards
The FCA has 11 Principles for Business, what are they?
Principle 1: Conduct business with integrity
Principle 2: Due skill, care and diligence
Principle 3: Management, systems and control
Principle 4: Financial prudence/adequate financial resources
Principle 5: Observe proper standards of market conduct
Principle 6: Consumers interests/TCF
Principle 7: Communication is clear, fair and not misleading
Principle 8: Conflict of interest must be managed
Principle 9: Suitability of advice
Principle 10: Client assets must be adequately protected
Principle 11: Relations with regulator must be open and cooperative
Which of the 11 FCA Principles for Business apply to the regulated advice process?
Principle 1: Conduct business with integrity
Principle 2: Due skill, care and diligence
Principle 3: Management systems and controls
Principle 6: Consumers interests/TCF
Principle 7: Communication is clear, fair and not misleading
Principle 9: Suitability of advice
T&C supports which of the FCA Principle for Business?
Principle 3: Management, system and control
Who is in scope of T&C?
All employees irrespective of role are subject to high level requirements referred to as competent employee rule.
Overseers of some specified back office functions
Other areas of permitted business activity, general insurance, mortgages.
FCA regulates 3 key areas of insurance and financial services….
Investments: packaged accounts such as life assurance, pensions OIECS.
General insurance products: private medical insurance, permanent health insurance, motor insurance.
Mortgages: excluding BTL and commercial mortgages.
The content of the T&C scheme, the FCA rules and guidence cover the following 7 areas….
Supervisor Maintaining Competence Appropriate Qualification Records Training Notifications Competence
Training needs, the FCA says training should be…
Assessed at the out set and reviewed at regular intervals.
T&C timescales
Maximum period for a trainee excluding continuos absence..
30 months excludes periods of 60 working days or more continuos absence
FCA statutory objective is to ensure the relevant markets function well. What are its 3 operational objectives?
Consumer Protection: Securing an appropriate degree of protection for customers.
Integrity: Protecting and enhancing the integrity of the U.K. Financial system
Competition: Promoting effective competition in the interests of consumers.
What areas require specialist exams?
Regulated mortgage contracts
Equity release
Long term care insurance
Advisers may provide advice on these areas without passing qualifications so long as someone who is competent monitors the advice
The following 2 areas require higher level qualification to be completed and the relevant skills to be demonstrate prior to providing advice…
Pensions transfers and opt outs
Broker fund adviser
What are the rules around CPD?
Minimum 35 hours to be completed, 21 hours must be structured
Statement of Professional Standard
Adheres to code of ethics
Meets FCA statement of principles and code of practice for approved persons
Is level 4 qualified
Has kept knowledge out to date via CPD
TheY act in public interest and further the development of their profession
The carry out effective verification services
They have effective systems and controls
The cooperate with the FCA
T&C guidance suggests supervisors demonstrate…
Relevant technical knowledge
Assessment skills and
Coaching skills
Record Keeping rules…
5 years - MiFID business such as fund manager, life offices IFA
3 years - non MiFID business such as mortgage and general insurance
Indefinitely - pension transfer specialist
