Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CISI: UK Regulation > Chapter 2: Financial Services and Markets Act 2000 & Financial Services Act 2012 > Flashcards

Chapter 2: Financial Services and Markets Act 2000 & Financial Services Act 2012 Flashcards

1
Q

What is the General Prohibition S19?

A

No person (firm) may carry on a regulated activity on the UK, unless he is either authorised or exempt fro the requirement to be authorised.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What classifies as regulated activity?

Defined in what ? 2001?

A

Specified activities in specified investments, defined in the Regulated Activities Order in 2001

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the Punishment for Unauthorised Investment Business?

How much and how long in prison?

A

Two years and or an unlimited fine.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the “Civil Remedies”, when it comes to Unauthorised Business?

enforcable and unenforcable?

A

Contracts are enforcable by the “injured party” (investor), but are unenforcable by the “offending person” (the firm)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are “Specified Investments”?

There are 16 so think of all you know, it isnt that deep.

A
  • Deposits
  • Electric monies
  • Insurance Contracts
  • Shares Debentures
  • Government and Public Securities
  • Warrants
  • Certificates representing certain securities
  • Units in a collective investment scheme
  • Stakeholder pension schemes / personal pension schemes
  • Options: Securities, currencies and precious metals
  • Futures for investment / speculative purposes
  • Contracts for Difference
  • Lloyds syndicate capacity and membership
  • Funeral Plans
  • Home finance transactions
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Are futures for hedging purposes classed as specified investments?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the 3 extra “Specified Investments”?

A
  • Greenhouse gas emissions allowance
  • Credit agreements / consumer hire agreements
  • Alternative finance investment bonds
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are non-specified investments?

A
  • Property deals
  • Currency deals
  • National Savings products
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are the Alternative Exchanges AKA?

A

Multilateral Trading Facilities and Organised Trading Facilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are “Specified Activities”?

Try and remember the important ones

A
  • Accepting deposits
  • Issuing electronic money
  • Effecting/performing / Administering Insurance contracts
  • Dealing in investments as principal or agent
  • Arranging and advising on home finance transactions
  • Operating MTFs and OTFs
  • Bidding in emission auctions
  • Managing investments
  • Safeguarding and administering investments
    *** Sending dematerialised instructions
  • Establishing or operating UCITs
  • Establishing or operating a pension scheme
  • lloyds market activities
  • Entering a funeral plan contract
  • Activities related to consumer credit
  • The setting of benchmarks
  • Advising on home land finance transactions**
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What does the book highlight as non-specified activities?

There are 4

A
  • Dealing as principal i.e acting as a market maker
  • News media (unless a subscribed tip sheet)
  • Trustees, nominess or appointed reps
  • Employee share schemes
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Who are exempt from regulated activities?

A
  • Appointed representatives
  • RIE and RCHs
  • FSMA Exemption order 2001 (Supranational bodies and central banks e.g. BoE and IMF)
  • Syndicate members of LLoyds of london (Underwriters)
  • Designated professional bodies (DPBs)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is a designated professional body (DPB)?

A

Regulated individuals will apply to these rather than the FCA or PRA for permission to carry out incidental regulated actvities.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are examples of DPBs?

A

Accountants, solicitors, actuaries, chartered surveyors, licesned conveyancers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the Authorisation Process?

A

Depending on the type of firm, a firm will need to submit an application pack to either the PRA and/or the FCA..

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What do Dual Regulated Firms need to do to become Authorised?

Is it dual?

A

Need to make a Single application to PRA but will need FCA consesnt.

17
Q

What does and “Application Pack” require?

A
  • Core details
  • Controllers
  • Business Plan
  • Disclosure of significant events
  • Approved person forms
  • Checklist and Declaration
18
Q

What are the “Threshold Conditions”?

Very simply

A

Minimum standards for being and remaining authorised.

19
Q

What are the 8 threshold conditions?

A
  1. Legal Status (PRA)
  2. Location of Offices (PRA) - registered UK office
  3. Business conducted in a prudent manner - appropriate financial and non-financial resources
  4. Effective supervision, including close links (FCA/PRA) (20% shareholding)
  5. Appropriate resources both financial and non financial
  6. Suitability of (FCA/PRA) - Fit and proper
  7. Business model (FCA) - Suitable business strategy
  8. Appointment of claims representatives (PRA) - for motor insurers only
20
Q

What is the purpose of the regulators supervision arrangements?

A

To mitigate and manage risks to statuatory objectives being met

21
Q

What are the 4 supervisory tools?

A
  • Identify
  • Diagnose
  • Remedy
  • Evaluate
22
Q

What factors are considered during the fit and proper test?

Bit cringe

A
  • Honesty, integrity and reputation
  • Competence and capability
  • Financial Soundness
23
Q

What in a nutshell is the approval process is the SMCR?

This is actually what it is

A

Under the SMCR an individual may be permitted to perform a senior management function, only after the regulator has appointed them approved status.

24
Q

What is FSMA S56?

Not!

A

FCA can issue prohibition orders against those who are not fit and proper.

25
Q

What is FSMA S59?

Not allowed.

A

No person may perform an approved function unless allowed by the regulator.

26
Q

What is FSMA S71?

There are 2 parts. They can Suiiii

A

A private person can sue a firm when.
* A prohibited individual carries out an approved function
* An unapproved function carries out a controlled function

27
Q

What is FSA S138D?

A

A private person can sue if they suffer losses from a frim breaching an FCA rule.

28
Q

How is Competence assesed?

Training and competence. What am i doing right now?

A

One must pass each mondule of an appropriate exam. Like the FCAs

29
Q

What are the exempetions from the assesing competence requirements?

A
  • Three years up-to-date relevant experience outside of the UK: May be exempt from examinations BUT NEVER REG MODULE
  • 30 day rule: where an oversees individual is in the UK
30
Q

What is the Public Interest Disclosure Act 1998 (PIDA)?

UK Whilstle Blowing Regime

A

A firm cannot include a clause in an employees contract preventing them from blowing the whistle on their employees practices.

31
Q

What are some of the risks (offenses) identified by the PIDA?

There are 4 (obvious)

A
  • Commiting an offense
  • Failing to comply with a legal obligaton
  • Breaching health and safety rules
  • Damaging the envirnoment
32
Q

Under the UK Whistle Blowing Regime, what are the FCA rules?

A
  • Appoint a non-exec or senior manager as the whislteblowing champion
  • Put internal whistleblowing arrangements in place
  • Tell employees about FCA and PRA whilsteblowing services
  • Present a report on whilsteblowing annually to the board.
33
Q

What is the Regulatory Decision Committee (RDC)?

Who are they accountable to? Who is the Chairman?

A

Independant committee outside the UK management structure
* Accountable to the FCA
* Chairman is an FCA employee

34
Q

What is the Enforcement and Decision Making Committee (EDMA)?

For the BoE

A
  • PRA committee at BoE
  • Its executive does no sit on any other board or panel at the bank
35
Q

What is the Upper Tribunal (Tax and Chancery Chamber)?

AKA TC Cut?

A
  • Independant of the FCA (Appointed by governments ministry of justice)
  • Considers appeal in relation to: Decision notices / Supervisory notices
  • Individual firms have 28 days to appeal (if they wish)
36
Q

What are the “Civil” law consequences for contravening the General Prohibition?

Where a firm can sue!

A
  • Injunctions
  • Restitution orders - pay compensation
  • Contracts are voidable at the discretion of the investor
37
Q
A

CISI: UK Regulation (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions