Chapter 2 Flashcards
what is an authorised person
an individual who has approval from the FCA to carry out regulated activities
What is an approved person
An authorised Firm
what are the 2 different types of authorisation
passporting
part 4a permission
who carries out part 4a permission
FCA /PRA
where do applications for part 4a permission go for FCA regulated firms
to the FCA
what does the FCA have to satisfy itself of when looking at part 4a permissions
applier has sufficient financial and management skill to undertake the relevant functions
where do you find the threshold conditions for part 4a authorization
in the COND sourcebook in Block 1: highlevel standards
where do dual regulated firms apply for part 4a permission changes
to the PRA
when can the PRA accept permissions for dual regulated firm part 4a changes
only with the consent of the FCA
who assess legal status of dual regulated firms
PRA
who assesses location of offices for dual regulated firms
PRA
where does a firm have to be located for part 4a permisssion
head and registered offices must be in the UK
what is the effective supervision condition for past 4a permission
a regulator must be satisifed that a controlling shareholder will not prevent the regulator from effective regulation
who is a close link
a company or an individual who owns more than 20% of the voting capital in a company
who assesses effective supervision for dual regulated firms
FCA/ PRA
who assesses appropriate non financial resources for dual regulated firms
FCA
who assesses appropriate non financial resources for dual regulated firms
FCA
who assesses prudent conduct for dual regulated firms
PRA
what is the prudent conduct condition for part 4a regulated firms
the appropriateness of the applicants financial and non financial resources
who assesses suitability for dual regulated firms
FCA / PRA
who assesses business model for dual regulated firms
FCA / PRA
who carries out passporting
the local regulator
what is passporting
allows a company to obtain authorisation to conduct business in the UK by being passported via a European directive
what is the UCITs directive
it allows collective investment schemes to be passporting
what is MiFID
it allows firms to be passported
how has the UK combatted it’s loss of rights to passporting into Europe
by opening a EEA based subsidiary which from there they can then passport into other EEA countries
what is the purpose of MiFID
to promote a single European market place
what are the main objectives of MiFID
increase post trade transparency across the EEA
ensure the best execution of trades
ensure cost effective execution venues are available
what is onshoring
when we brought over all of the EU laws into UK laws surrounding MiFID
who does the EEA comprise of
EU countries
Norway
Iceland
Liechtenstein
what did the MiFID II change
changes were made to regulate unregulated markets by creating organised trading facilities
what is MiFID business
it is a subset of regulated activities
who does MiFID apply to
any firm whose head and registered offices are situated in the same EEA state and which conducts core investment activities
what are the core investment activities
reception and transmission of orders
execution of orders
portfolio management
investment advice
underwriting and placing
operating a MTF or OTF
what are MiFID investments
shares, bonds and derivatives
what is MiFIR
Markets in Financial Instruments Regulation
it makes MiFID regulation i.e. EU law
where is the home regulator
where the firm is regulated and licensed
what are ancillary services
safekeeping, custody and admin
granting loans to an investor
advice to undertakings on M&A
foreign exchange services
investment research
underwriting
is a firm which carries out ancillary services only MiFID
no
when can a firm carrying out ancillary services be passported
when they are carrying out the services alongside one or more core activity
who oversees the business when a firm is doing business with another company in a different country
the home regulator for everything other than COB rules
when does the host state regulator oversee the businesss
when carrying out COB related activities
then the host state will regulate the activities
who are exempt persons
appointed representatives
recognised investment exchanges and clearing houses
lloyds syndicate members
members of designated professional bodies
governement entities
central banks
councils
who has the responsibility for appointed representatives
the firm that employs them must ensure that they are complying with regulation
what are appointed representatives also known as
tied agents
what is an RIE
essentially an exchange that has meet the recognition requirements set out in the FSMA 2000
what are the requirements for an exchange to become recognised
high standards of integrity, sufficient financial resources
business on the exchange is conducted in an orderly manner
price transparency and effective monitoring
rules setting out procedures in the event of a default
arrangements for investigating complaints
examples of recognised exchanges
ICE Futures Europe
London Metals Exchange
London Stock Exchange
Aquis Stock Exchange
what happens through a clearing house
agreements to buy / sell securities happen on an exchange but the delivery of the security in exchange for cash occurs through the clearing house
what are the recognized clearing houses in the UK
Euroclear UK and Ireland
LCH
when would a member of Lloyds syndicate need authorisation
when advising or managing