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IAD Level 4 > Chapter 10- Application of COBS > Flashcards

Chapter 10- Application of COBS Flashcards

1
Q

What does COBs apply to

A

DIB and long term insurances business in relation to life polices. Indirectly to appointed reps

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2
Q

Clients best interest rule

A

All clients (including ECP)

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3
Q

Client categorisation

A

All clients

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4
Q

Electronic media

A

All clients

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5
Q

Inducements

A

All customers

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6
Q

Inducements and research

A

All clients

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7
Q

Direct offers or invitations

A

Retail clients only

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8
Q

Fair agreements

A

All customers

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9
Q

Information about the firm

A

All clients

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10
Q

PRIIPs and KFDs

A

Retail clients

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11
Q

Suitability

A

All customers . PC (MIFID) RC (DIB)

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12
Q

Appropriateness

A

All customers. MIFID (RC and PC) Direct offers (RC)

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13
Q

Conflicts of interest

A

All clients

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14
Q

Best execution

A

All customers

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15
Q

Order of execution policy

A

All customers

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16
Q

Client order handling

A

All customers

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17
Q

Aggregation and allocation

A

All customers

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18
Q

Limit orders

A

All customers

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19
Q

Personal account dealing

A

All clients

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20
Q

Transaction confirmation

A

All clients

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21
Q

Periodic reporting

A

All clients

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22
Q

CASS

A

All clients

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23
Q

Client categorisation

A

All clients

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24
Q

Most info disclosure rules

A

All clients

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25
Chinese walls
All clients
26
Investment research
All clients
27
Financial promotion rules
Retail clients only
28
KFD , KIID , KIDs
Retail clients only
29
Who are per se professional clients
``` Authorised regulated firm Central bank Government Supranational body Large undertaking Other institutional investors e.g SPV ``` (Not per se but elective professionals)
30
Who are per se eligible counter parties
Authorised reg firm Central bank Government Supranational body
31
Who are elective EPC
Large undertaking (never an institutional investor e.g SPV)
32
What makes a large undertaking
Balance sheet 20m Net turnover 40 m Own funds 2m
33
Non MIFID business per se PC requirements
LLP 5m Company 2/3: 12.5m EUR 25m net turnover average no of employees 250, governments and public bodies Institutional investor main activity to invest in FI (MIFID) or DIB (non mifid)
34
Elective PC requirements
Average trade frequency of 10 per quarter in previous 4 quarters Greater than 500k euros in portfolio Worked in financial sector for more than one year in professional capacity
35
What consist of ECP business
Dealing on own account Execution of orders Transmission of orders
36
Per se ECP
Authorised firm Gov Central bank Supranational
37
Elective eligible counter parties restriction
No available to an institutional investor e.g SPV
38
How long voice recording kept for
5 years
39
Minor non monetary benefits
Info that is generic or personalised to individuals Written by a third party and paid by issuer to promote a new issuance of company Participation in training Hospitality
40
Exemptions from inducement rules for research
SME research FI, currency and commodity research Independent research providers (not linked to EO or broker services) Openly available research
41
Can you rely on other firms info
MIFID- yes | Non mifid- if info is in writing, competent, independent
42
Must not communicate a financial promotion unless
It is an authorised person | Or content had been approved by an authorised person
43
Never in breach of a financial promotion by a third party if
Authorised firm approved To those intended Fair clear and not misleading
44
Exemptions to financial promotion rules
``` Those exempt from FPO Outside UK Subject to takeover code or similar codes Personal quotes or illustration One off promotions not cold calls ```
45
FP are received by retail clients firms must ensure
``` It’s name is included Accurate and fair Comprehensible Does not obscure items Fair clear not misleading ```
46
What do you say when you call someoje
Identity the caller employer purpose of call If wish to continue call and terminate if not Point of contact in event of cancellation Call at appropriate time of day
47
What is Made Directed at Recipient
Made-FP addressed to a specific person Directed at- generally accessible e.g newspaper or TV Recipient- anyone who reads or heard communication
48
What are permitted to be sold to RC in promotions
Generally marketed non geared packaged products Deposits Readily realisable securities other than warrants
49
What are packaged products
``` Life policy CIS regulated Investment trust savings scheme Stakeholder pension Personal pension ```
50
What is a high volatility fund
CIS regulated which invests in warrants or derivatives or borrows over the long term, causing movements in price of units to be significantly amplified
51
What fair agreements do RC and PC apply to
RC- DIB | PC- MIFID business
52
What is excluded from fair agreements rule
Insurance businesses where the firm acts as principal
53
What products are PRIIPs KIDs for
Investment funds Insurance based investment products Retail structured securities Structured term deposits
54
What do KFDs apply to
Package products Cash deposit ISAs JISAs CTF
55
Cancellation rights for life policies and pensions and other products
Life policies and pensions- 30 calendar days | Other products -14 calendar days
56
What’s in a SPS
Qualification from FCA handbook 35 h CPD 21 structured Annual declaration of compliance w FCA conducts rules Accordance to ethics Send reports to qualification status of retail investment advisors to FCA
57
When is suitability required for RC and PC
RC- all business PC- MIFID business When - making personal recommendation -acting as an investment manager
58
When is appropriateness for RC and PC
MIFID business- RC and PC | Direct offers-RC
59
What are non complex FIs
Shares/bonds Money market instruments Units in a UCITs scheme
60
What do firms require to manage conflicts
Information barriers including reporting lines Remuneration structured Segregation of duties Policy of independence
61
When a firm publishes research to client or public it must ensure
No inducement is received from those with material interest Not the promise issuers favourable coverage Issuers covered are not permitted to review drafts of resesfch
62
What is best execution criteria
Client categorisation Type of order Type of FI traded Characteristics of execution venues
63
What info fo clients give of orders execution policy
List of execution venues Factors that inform firms choices Additional info for retail clients
64
What are exemptions to limit orders being made public
Client instruction | Over 10% average daily trading volume
65
Exemptions for transaction confirmations
MIFID- none | Non mifid business - if requested by the client
66
When are periodic statements given
General- 3 months | Leveraged portfolios - prepared every month, sent out promptly
67
When should money be reconciled for client money accounts
Internal- each business day External- as often as necessary Short falls/excess Internal- close of business day External- as soon as possible
68
When should client assets be reconciled
As often as necessary | Short falls or excess as soon as possible
69
Exemptions from CASS
``` ICVC and UCITS schemes Incoming EEA firms Banks and building societies Coins held for the value of metal Money held for delivery vs payment (DVP) Money due and payable to the firm ```
70
Time limits for pension contracts, stakeholders pensions and life assurance
5 years
71
Time limits for pension transfers and opt outs, free standing additional voluntary contributions (FSAVCs)
Indefinitely
72
Records of telephone communications
5 years from record creation
73
Records offsite
Must be readily assessable

IAD Level 4 (4 decks)

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