Chapter 3 (9 exam questions): Legal concepts and considerations relevant to financial advice Flashcards
What is a sole trader?
An individual who solely controls their own business.
They are self-employed and are personally liable for any debts and liabilities accrued by the business
HMRC see the business and person as the same thing
What tax do sole traders pay?
Soletraders pay income tax and CGT
Income tax on profits of the business
CGT on any capital gains made by the business, for example when selling business assets.
Sole trader pay Class 2 NICs at a flat rate. This gives the individual entitlement to various state benefits, such as the single-tier state pension. Paid via HMRC self-assessment
Class 4 which is earnings related is also payable by Sole traders.
Typically, soletraders only pay class 2 and 4 NICs. Do they ever pay class 1 ( what the employed pay )
If the sole trader employs people they will then pay EMPLOYER Class 1 NICs because they will need to deduct income tax and employee Class 1 NICs from the employee’s salary.
Can sole traders employ people?
Yes, but they are typically on there own responsible for all areas of their business
What is a partnership?
Who are partnerships taxed?
The same as sole traders except their is more than 1 individual liable and responsible for the business.
The partnership is NOT a separate legal entity to the business, they are deemed as being the same entity. Each partner is ‘jointly and severally liable’ for the business’ debt.
Each partner is self-employed.
Each partner pays income tax, NICs and capital gains tax, on their share of the business profits. (The tax treatment and deadlines are the same as sole traders)
Why were Limited Liability Partnerships introduced?
All partners in a partnership are ‘jointly and severally liable’ for the business debt.
Because of this, many partners went AWOL, leaving others to pay the debts of the business. Therefore, the limited liability partnership or LLP was introduced
LLP were introduced by The Limited Liability Partnership Act 2000 in 2001
What are limited liability partnerships?
The same as a traditional partnership in terms of tax treatment, profit sharing, and that each partner is self employed, EXCEPT the partners are not liable for the business debts.
The business is its own separate legal entity but is run by the partners
The ONLY liability each partner has is the amount they invest in the LLP
Compare a limited company to a limited liability Partnership
What are limited companies?
Where must companies register?
Companies must have a Memorandum and Articles of Association. What is this?
Limited companies are their own separate legal entity.
The company is liable for its own debts and can only use its own assets to meet its liabilities… nothing else (ie, shareholders and employees can not be made liable)
Companies are registered at Companies House.
Companies must have a Memorandum and Articles of Association. which show who holds what company positions and responsibilities
Can employees of a limited company ever be liable for a limited companies debts?
Typically no because limited companies are their own separate legal entity.
However, employees can be liable for the debts if they are proven to have acted unlawfully, for example continuing to trade an insolvent firm
Who owns limited companies?
Who runs and manages the limited company?
The business owners are the shareholders
The business is run by its directors, who are company employees.
Directors and shareholders can be the same person
Can a limited company have 0 directors?
No, there must be a minimum of at least 1 director
They manage and run the company
How are limited companies taxed since they are their own separate legal entity?
As the company is a separate legal entity, its profits and capital gains are liable to Corporation Tax
(This obvs differs to partnerships and soletraders, where the business is the same legal entity and therefore its pays CPT and Income Tax)
The company also pays EMPLOYER class 1 NICs
Private limited companies benefit from Business Relief.
What is this?
Business relief is where shares qualify for 100% inheritance tax (IHT) relief, if they have been owned by the deceased for at least 2 years at the point of death.
This can prove very helpful and people often retain a shareholding in a company to benefit from this
What is the difference between a company with a LTD designation and a PLC designation?
LTD = Limited Company. Privately-owned
PLC =Publicly-limited company. Publicly owned.
(shares become available on the stock market for purchase to the public)
If a company ‘floats’ on the stock exchange, what does this mean?
It becomes a publicly-owned company (PLC)
For a privately owned limited company (LTD) to be become a publicly owned limited company (PLC), what must the company do?
Have at least 25% of its shares on the stock market available to the public for purchase.
ie, at least 25% of the company must be owned by the public
Tell me some key differences between PLCs (publicly-owned limited companies) compared to LTDs (privately owned limited companies)
PLCs = Must have at least 2 directors and at least 2 shareholders. LTDs only require at least 1 director.
PLCs = A company secretary must exist, who is a member of a professional body. This is not required for LTD’s
PLCs= there must be an annual general meeting (AGM) of the shareholders with an annual report.
Any takeovers and mergers of PLCs are controlled by the Takeover Panel. This is an independent body which supervises and regulates takeovers with the aim of ensuring shareholder fair treatment.
For an IVA to be agreed, what percentage of creditor must agree to it
75% of creditors need to agree to the IVA. The IVA will be reviewed annually by an insolvency practitioner.
If I were to a say a company has gone bankrupt is that the correct term?
No
Individuals go bankrupt
Companies become insolvent
What is the Insolvency Act 1986 and the Enterprise Act 2002?
They are two key pieces of legislation in respect of bankruptcy
When a debtor is declared bankrupt their assets pass to the ‘official receiver’ order in which creditors are paid is
What is the difference between the official receiver and the insolvency practiser
An official receiver is appointed after the court accepts the bankruptcy petition (where the creditor requests the person is made bankrupt)
The official receiver then takes control of the assets and calculates the individuals total assets/liabilities etc. They do the admin work.
The official receiver then appoints an insolvency practitioner is made ‘trustee in bankruptcy’ who then sells the assets until liabilities are met.
Once the insolvency practitioner has been appointed as the ‘trustee in bankruptcy’ by the official receiver, they will proceed to sell the assets to meet the liabilities of the creditors. How do they know what creditors need paying first?
The insolvency act 1986 specifies an order for liabilities to be repaid:
1st to be repaid:
Bankruptcy costs – all the fees of the official receiver, trustee in bankruptcy, the courts.
2nd to be repaid:
All preferential creditors – such as missed wages, accrued holiday pay, pension contributions and any secured borrowing i.e. mortgages.
NOTE: STAGE 1 AND 2 ARE SWAPPED FOR COMPANIES GOING INTO LIQUIDATION
3rd to be repaid: Unsecured creditors –all other creditors not classed as preferential
What are culpable bankrupts?
Culpable bankrupts are those who have had the 12 month period extended because they continued to trade even though they knew they would go bankrupt
How much can undischarged bankrupts borrow?
and what about discharged bankrupts
UD Bankrupt= NO
D Bankrupt = yes but they must declare to the creditor if they are looking to borrow more than £500
If a company is going through liquidation’ what does this mean?
If a company is ‘winding up’ or being ‘wound-up’ what does this mean?
Both mean the same thing
Where a company ceases trading, so that its assets can be distributed to creditors and members and once everyone who can be paid has been paid, the company is dissolved. It will also be removed from the Companies House register.
This happened to Toys R Us, Debenhams etc
Company insolvency is a major event and can result in some creditors not receiving their monies
Therefore, it is important to explore other options before, just like it is for individuals like using debt relief orders instead of bankruptcy for example.
What other options are available for companies?
Company Voluntary Arrangements (CVA) - an agreement is reached with creditors, who accept an agreed lower amount back. (Its the equivalent to an IVA)
Administration - if the company is ‘saveable’. Where an administrator is brought in to run the company
If neither a CVA nor Administration is viable, then having the company wound up may be only option
There are three parties involved in a life contract: What are they?
The proposer/the applicant/the policyholder -
(They are also known as the ‘assured’, once the policy is in force).
They are the individual/company applying for the cover and will pay the premiums.
The life assured -
The person(s) whose death will result in the policy paying out. This could be the same as the assured, or it could be a different individual.
The life office -
The insurance company who assesses the risk, and the premium required
What is an ‘invitation to treat’ in relation to financial contracts, such as insurance contracts
A company’s advert, brochure, etc that is selling their product to the consumer
It is NOT the offer of contract. An offer is one of the requirements for a contract to be legally binding. The ‘offer’ in this case is the contract that must be signed by the applicant.
The offer and ‘invitation to treat’ are commonly confused as being the same thing
What is a consideration in relation to contract law?
A consideration is anything of value (such as an item or service), which each party to a legally-binding contract must agree to exchange if the contract is to be valid.
For example, in an insurance contract, the consideration for the life company will be the insurance (service) and for the applicant the premiums they pay
If only one party offers consideration, the agreement is not a legal- binding contract.’
If only 1 of the 2 parties in a contract offer a consideration, will the contract still be valid?
Contracts are not legally binding/valid unless both parties offer a consideration
In other words, both parties must stand to lose or gain something
For example, In a protection policy, the policyholder pays the premiums, and the life office guarantees to pay the sum assured in the event of a valid claim. There is therefore consideration on both their parts
Life assurance contracts have extra legal requirements to be deemed a valid and therefore legally binding contract.
These are:
Both parties show ‘Utmost good faith’
The applicant has an ‘Insurable Interest’
Explain what both of these are
Utmost good faith =
Applicant must present all material facts and take care not to misrepresent
The life company must disclose all material facts about how their policy works such as what it does/does not cover and also must not misrepresent
‘Insurable interest’ =
The policyholder must have a financial interest (‘insurable interest’) in the life assured. The life assured cannot be someone who’s death will not financially disadvantage the policyholder. For instance, a stranger, or a friend you haven’t spoken to in years
There are six situations where insurable interest is automatic.
What is insurable interest firstly and what are the 6 situations?
Insurable interest is an extra legal requirement unique to insurance contracts. It states the policyholder must have a financial interest (‘insurable interest’) in the life assured. In other words their death must cause a negative financial impact to the policy holder. If there is no insurable interest, the contract is invalid
There are six situations where insurable interest is automatic (it doesn’t need to be proven):
When insuring own life
When insuring spouse civil partner
An employer insuring their employee
A mortgagee insuring a mortgagor
A creditor on a debtor
Between business partners
For any other situations, evidence must be provided at the point of application to prove insurable interest
Who does not have capacity to contract?
Minors
Individuals without mental capacity
Individuals who are drunk (or not fully in control of their faculties) at the time of entering into a contract.
Individuals under duress
Any contracts taken out by minors (below 18) are 1 of 3 types. What are they?
Contracts for minors can either be: Binding, Binding unless repudiated, non-binding
1) Binding:
These are enforceable only if they are to benefit the minor, such as a contract of employment/apprenticeship.
2) Binding unless repudiated:
These are contracts that the minor can effectively back-out of before their 18th birthday ( known as ‘during minority)’.
Rent agreements are an example.
3) Non-Binding:
All other contracts beside the above.
If a contract is ‘during minority’ what does this mean?
Refers to 1 of the 3 types of contracts for minors.
It means they can back out before their 18th, (during minority), without any legal consequences. Basically the contract is not binding until their 18th (and a reasonable time afterwards) so they can back out. For example, rental agreements
Define the following in relation to agency law:
The principle
The agent
The principle = Who authorises another person (the agent) to act on their behalf. They are responsible for the agents actions
The agent = Who acts on behalf of the principle
For example:
IFA is agent, client is principle
FA is agent, FA’s firm is principle
Estate agent is agent, the estate agents firm is the principle
REMEMBER: IFA’s are agents of the client so client is responsible got their actions
Single/multi tied advisors are agents of their firm so the firm is responsible for their actions.
Contract law, and agency law summary
Tell me about freehold, leasehold and commonhold tenure
For leaseholders to purchase the freehold of their property, what proportion of leaseholders must agree to the purchase?
50% of leaseholders must agree
Explain commonhold ownership:
Introduced by the commonhold and Leasehold Reform act in 2002 due to increased popularity of flats in major cities. used mainly for multi unit developments
The units (flats) are owned outright (ie as freehold) by occupiers
Each unit-owner is a member of a commonhold association (a company)
The association owns the common areas of the development (the staires, lifts, hallways etc
The Commonhold and Leasehold Act 2002 provided leaseholders with the right to buy the freehold or extend the lease
What requirements must be met before a leaseholder can action this right?
Lived at least 2years in the property
Their lease is a ‘long lease’ (lease has 21 years or more to run)
50% of leaseholders must agree
Tell me about:
- Joint Tenancy
- Tenants In Common
‘Joint Tenancy’ - Each tenant has an equal share of the property and when one dies, the survivor inherits the deceased owner’s share automatically. This can NOT be changed under any circumstance, for example via a will. To sell the property both tenants must agree
Tenancy in Common-
Each party owns a separate share/’equitable share’ in the property. When one party dies, their share forms part of the deceased individual’s estate. Tenants can sell their share at any moment.
What is Shared Ownership?
Shared ownership is a housing scheme where an individual buys a share of a property from a housing association, such as 25%, and then pays rent to the association on their share.
Overtime, the individual can buy more of the property from the association known as ‘staircasing’ until they own the property outright
What is help-to-buy?
Help to Buy is a scheme introduced by the government to make it easier for people with small deposits to buy their first property, or for existing homeowners to move to a new house.
There are two forms of help to buy:
‘Equity loan’
‘Mortgage guarantee scheme’
What is the Help to Buy: Equity loan scheme?
Explain how it works, what happens when the property is sold and its entry requirements
Where the government lends a borrower up to 20% (or 40% in Greater London) of the purchase price of their new property.
No charges are levied on the 20% government loan (40% Greater London) for the first 5 years
Basically, the house is 100% owned by the buyer made up of 3 parts: their mortgage, their interest-free equity loan and their deposit.
Any sale triggers the repayment of the interest-free loan
Requirements:
5% minimum deposit required from borrower
Borrower’s mortgage is for 75% (or 55% in Greater London)
Ie, the borrower must meet the costs of at-least 80% (or 60% in London) of the property
The borrower cannot own any other property.
If an individual already owns another property would they be eligible for the government equity loan scheme?
No
The borrower cannot own any other property. This also includes part exchanging an existing property
What is the Help to Buy: mortgage guarantee scheme
How does it work? What is its aim? What is its requirements?
Where the government backs LENDERS for mortgages with very high LTV, up to 95%.
The government guarantees the lender a certain proportion of the property value if repossession occures.
The aim is to increase the low-deposit mortgage market.
Requirements:
The borrower has to be able to afford to service up to a 95% mortgage.
The borrower cannot have a history of mortgage arrears.
Properties can be either new-builds or existing, valued at up to £600,000.
The mortgage has to be on a capital and interest (repayment) basis
The mortgagor must be an individual (natural person), NOT a company
Mortgage and general insurance became regulated following the Financial Services & Markets act 2000
Where are those rules found and what year did it come into action
Mortgage rules are contained in the Mortgage Conduct of Business introduced in 2004 (think MCOB = 4 letters = 2004).
General insurance became regulated in 2005 and the rules are found in The Insurance Conduct of Business Sourcebook (Think, ICOBS = 5 letters = 2005)
Beside sickness what is another common reason someone may grant POA
You may decide to travel abroad for a gap year, and want someone to manage your UK financial affairs on your behalf whilst you are away so general power of attorney may be used
Can there be more than one donor in a POA arrangement?
Only 1 donor is allowed but there can be multiple attorneys
Can there be more than one attorney in a POA arrangement?
There can be multiple attorneys but only 1 donor is allowed
What is general POA?
Can it be revoked?
Allows someone to act on a day to day basis on the donor’s behalf. The power is only valid whilst the donor is mentally capable of making their own decisions ( a major disadvantage of this type of power )
A general power is automictically cancelled on the donor’s bankruptcy, death, mental incapacity, or at the end of a specified term, or on the Donors request
What is Enduring POA?
What is the downside of EPA?
An EPA is effectively a ‘General Power of Attorney’ but allows the powers to continue if a donor’s mental capacity fails
Once mental capacity is lost, it must be registered with the Office of the Public Guardian for the EPA to be activated (this is another disadvantage. LPA can be activated before mental capacity is lost)
No provision for health care is provided in EPA (major disadvantage)
The power can be revoked by the Court of Protection if an attorney is deemed to be acting inappropriately
There are 2 elements of a LPA. What are they?
Personal Health and Welfare (not available in EPA)
Property and financial affairs
When is LPA revoked automatically?
Bankruptcy (Bankruptcy does not apply to health and welfare LPA)
death,
donor’s request,
if donor and attorney are married and they divorce
When an individual dies, they do so either testate or intestate
What do either terms mean?
Testate means they have died with a valid will.
Intestate means they have died with no will, or it was invalid.
What does the term ‘estate’ mean
The total value of a deceased’s assets is known as the ‘estate’
Individuals cannot continue to ‘own’ assets on death, so any property must be transferred to another person.
Who is the testator?
Who are the executors?
Testator: The person making the will
Executors: Their job will be to administer the estate, collect any debts, pay any taxes and bills and distribute the assets in accordance with the will. There are usually at least two executors.
What is revocation of a will?
Where an individual testator changes the provisions in their will or cancel it altogether or the testator acts in a way that cancels it regardless of whether they intended to or no
What are chattels?
When someone dies their chattels will form part of their estate.
When someone dies their chattels will form part of their estate.
It’s all tangible moveable property except:
money, or security for money.
property used at the date of death by the intestate solely, or mainly, for business purposes.
property held at the date of death solely as an investment
What are Executors and Administrators collectively known as?
legal personal representatives (LPR)
There are the two grants of representation
What are they?
Grant of Probate (where there is a valid will - the deceased dies testate)
Grant of Letters of Administration
(where there isn’t a will or the will is invalid - the deceased dies intestate)
NOTE: either must be granted If the deceased person’s assets excluding land, property, and shares are more than £5,000 before an estate can be distributed.
What is the purpose of trusts?
A trust is a means of arranging property (assets) for the benefit of other persons without giving them full control over it
What are the names of the 3 parties involved in a trust?
Explain the role of each:
settlor, trustees and beneficiaries
Settlor:
This is the original owner of the asset
Trustee:
The legal owner of the asset held in trust. They own the asset temporarily and control it for the term of the trust who look after the interests of the beneficiary.
Beneficiary:
These are the long-term intended recipients of the asset. They have ‘beneficial or equitable ownership’ of the asset.
What is the downside of the settlor also being the beneficiary of the trust?
When a settlor is also the beneficiary of the trust it is known as ‘possession’
The downside of this is that it will negate any tax advantages of the trust because the settlor is still benefiting from the asset and this isn’t allowed in inheritance tax law
What basic requirements must trustees meet?
Trustees must be aged at least 18, of sound mind and not bankrupt. This is because they are in control of trust assets on behalf of beneficiaries
If they are a non-professional trustee, they must reach competence in 6 months
How are trusts different to contracts?
In trusts there does not need to be an agreement between the settlor and the beneficiary, so it does not class a contract
What are ‘bare or absolute’ trusts?
What are discretionary /flexible trusts?
‘bare or absolute’ trusts:
Very inflexible
Opposite to below
Has a fixed and unchangeable beneficiary. The trustees role is to transfer the trust assets to the beneficiary at a stated age (usually 18). Trustees have no control over how assets are distributed. Known as a ‘bare trust’ if beneficiary is younger than 18. Known as an ‘absolute trust’ once the beneficiary turns 18.
discretionary /flexible trusts :
Opposite to above
Trustees have complete control over how assets are distributed to beneficiary’s.
What is a discretionary /flexible trust?
Appointment of assets are at the discretion of the trustees
What is ‘Interest In Possession’
Its a term used in relation to trusts
Just means the beneficiary has a right to income or capital of the trust assets
For bare/absolute trusts the beneficiary has IIP because they have a right to the the trust assets. Ie, it will be transferred to them at a certain age no matter what. However, beneficiaries in flexible/discretionary do NOT have IIP because they have no right to the assets - the trustee chooses how the assets are distributed.
What are power of appointment trusts?
Where the trustees can vary and appoint beneficiaries within a set group of individuals
What are successive trusts?
USED IN ESTATE PLANNING
LEARN IT #
What can trusts be used for?
There are many many uses. Here are a few:
Keeping trust assets outside an individual’s estate (to reduce IHT liability)
Ensuring swift payment of benefits to the intended beneficiaries
because trusts can bypass the need to get Grant of Probate or Letters of Administration
Keeping pension fund assets separate from trading accounts
This offers protection in the event of insolvency, as the liquidators cannot use pension funds to offset trading losses.
Protecting pension assets from misuse
What are trust deeds?
Trust deeds are often used by life companies to help create trusts.
These provide the legal framework for mainstream cases and avoid the need to write individual trusts for each case. More complex scenarios may need bespoke trust deeds to be created, often at considerable cost
What are Will trusts?
Created by a will and comes in effect at death. Its aim is to satisfy the deceased wishes.
Used typically where the estate is being passed to a minor (minors do not have capacity to receive full IHT inheritance)
If a trustee loses all the trust assets by poorly investing it, what can the beneficiary do?
beneficiaries can hold trustees accountable if it all goes wrong by taking them to court
When can trustees be removed?
A trustee will be removed from their duties when they:
resign their duties or die.
are removed or retired under the provision of the trust deed.
are removed in accordance with the Trustee Act 1925 (they have failed to discharge duties).
are removed by a court
In relation to trusts, it must be possible to determine the beneficiaries at any time.
They don’t have to be specifically named, but must be capable of being described i.e. my wife or my children.
Beneficiaries can have different types of interest and can be individual or jointly nominated:
What are the different types of interest (ie, how can assets be distributed)
Absolute interest
-Entitled to the asset absolutely.
Life interest
-Entitled to income but not capital.
Reversionary interest
-Entitled to the assets after the termination of a life interest.
Contingent interest
- Only entitled in the event of contingency, such as getting married (so they may never come into possession, if they remain single).
John is a director of his own company. He plans to retire soon but wants to keep hold of his company shares. The MOST likely reason for this is that John…
wishes to avoid income tax.
is obtaining tax relief on commercial property.
can pass the shares to his children capital gains tax free.
can pass the shares to his children inheritance tax free.
can pass the shares to his children inheritance tax free.
If John has owned the shares a minimum of two years when he dies, they may benefit from Business Relief. This means they will be passed inheritance tax free to his children
Marcus has an Individual Voluntary Arrangement (IVA). How often must his insolvency practitioner review this arrangement?
Monthly.
Quarterly.
Bi-annually.
Annually.
Annually.
An IVA must be reviewed each year by the insolvency practitioner. This involves a review of the debtor’s (Marcus’) finances and a report will be sent to his creditors
Steven married Joanne two months ago and has just died. He has a will in place that was written four years ago. What will happen to his estate?
He will die intestate.
The will determines who benefits from his estate.
The estate will go to the crown.
Joanne will inherit everything as they do not have any children
He will die intestate.
Marriage invalidates a will, unless the will states that it was made in anticipation of marriage, and there is no mention of that in the question stem.
Joanne is taking out a rental contract on a commercial office. In contract law which of the following is NOT required?
Offer.
Intention.
Objection.
Acceptance.
Objection.
Objection is not a term that relates to a valid contract and its requirements
Abdul is taking investment advice from his local IFA. Under the law of agency, who is the agent?
The IFA is the agent of the product provider.
The IFA is the agent of Abdul.
Abdul is the agent of the IFA.
Abdul is the agent of the product provider.
The IFA is the agent of Abdul.
The IFA has responsibility to Abdul, and acts on his behalf as his agent. (Remember, FA’s have responsibility to their firm)
When Susan died, aged 76, she had no valid will. She was survived by her husband, Bernard, and one brother, Marcus, aged 68. Her estate was valued at £500,000. Her executors are considering how the estate will be distributed. You inform them that…
Bernard will receive £322,000 absolutely and a life interest in the other £178,000.
Bernard will receive £470,000 absolutely and a life interest in the remaining £30,000.
Bernard will receive £322,000 absolutely with the other £178,000 going to Marcus.
Bernard will receive £500,000 absolutely with £0 going to Marcus.
Bernard will receive £500,000 absolutely with £0 going to Marcus.
The laws of intestacy state that where a spouse survives the death of an individual without children (issue) then the spouse receives everything as the sole beneficiary. If there were children (issue) then it would be 322k to spouse and 50% of residue left over with other 50% of residue to children.
Kathryn has established a discretionary trust and Sue an absolute trust. It is true to say that…
the absolute beneficiaries are unknown for the discretionary trust.
the discretionary trust beneficiaries are known.
the beneficiaries are unknown for the absolute trust.
the absolute trust beneficiaries can be easily changed
The absolute beneficiaries are unknown for the discretionary trust.
A discretionary trust has a flexible power of appointment element within it. This means that no beneficiary has an interest in possession, so are not absolutely known.
Jackie has a property where she owns her flat in perpetuity (for ever) but not the freehold. This is possible because Jackie has…
purchased on a commonhold basis.
a lease of 99 years.
a lease of 20 years.
purchased on a shared-ownership basis.
purchased on a commonhold basis.
Jackie is most likely to have purchased her property on a commonhold basis. This is where she owns her own unit, i.e. the flat, and is a member of a Commonhold Association. This association owns the land and the freehold, not Jackie as an individual
Mavis is 82 and concerned about her health. Which of the following elements should Mavis include in a lasting power of attorney (LPA), if she wishes her son, Eric, to make health decision on her behalf, as her attorney?
Personal health and welfare.
Property and finance.
Letter of wishes.
Expression of wish
A personal health and welfare element will give these powers to Eric
An individual, firm, or market can only carry out regulated activities in the UK if they are WHAT or WHAT?
What happens if they carry out the activity without having one of the requirements?
An individual, firm, or market can only carry out regulated activities in the UK if they are either authorised or exempt.
Otherwise, they are guilty of a criminal offence.
This is collectively known as ‘general prohibition’
What did the The FSMA 2000 do?
It simplified the UK regulatory landscape, and gave us one regulator, one main ombudsman, and one main compensation scheme
The Financial Service Authority (FSA)
The Financial Ombudsmen Service (FOS)
The Financial Service Compensation Scheme (FSCS)
