Brainscape's Knowledge GenomeTM

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


See full index

CISI: UK Regulation > Chapter 3: Associated Legislation and Regulation > Flashcards

Chapter 3: Associated Legislation and Regulation Flashcards

1
Q

What is the purpose of the EU Market Abuse Regulation (MAR)?

A
  • Enhances existing criminal and civil liabilities
  • Provides a number of additional preventative measures for market abuse
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What did the EU Market Abuse Regulation becom post BREXIT?

A

Onshored to become the UK MAR

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

What is the CJA 1993?

A

The criminal justice act 1993

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

Is Market Abuse seen as a Criminal Offence or a Civil Offence?

A

Civil offence

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

What is the purpose of the CJA 1993 in relation to Market Abuse?

A

Defines the criminal offences of insider dealing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the purpose of he FSA 2012 in relation to Market Manipulation?

A

Defines the criminal offences of misleading statements and impressions.

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

What are the features of “Inside Information”?

There are 4 key points

A
  • Unpublished (not been made public)
  • Price sensitive
  • Specific or precise (not rumours)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

If a person passes on MNPI, what may mean this is not an offence?

A

If the infomration was generic, unclear or imprecise

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What classifies an “Insider” in relation to insider dealing?

A

Anyone who KNOWS the information is inside (private) and **KNOWINGLY **acquired it from an inside source.

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

What part of the Criminal Jutice Act 1993, relates to offences regarding insider dealings?

A

Part 5

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the Securities in scope of the CJA 1993?

A
  • Shares
  • Bonds
  • Warrants
  • Depository Receipts
  • Futures, Options, CFDs (on securities)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is classified under the Criminal Jutice Act 1993, as an offence relating to insider dealings?

A
  • Deal
  • Encourage someone to deal
  • Disclose
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the NOT Securities in scope of the CJA 1993?

FICC but no FI

A
  • Commodities / Commodity Derivatives
  • Currencies / Currency Derivatives
  • Collective investment cheme units/shares
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the General Defences for dealing or ecouraging someone else to deal with potential “insider information”?

What are the assumptions that make it ok?

A
  • No advantage expected
  • Believed the info had been widely disclosed
  • Would have dealt anyway
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the General Defence for disclosing potential “insider information”?

What is the assumption that may make this ok

A
  • Did not expect the recipient to deal
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are the special defences for inside information?

A
  • Market Makers (acting in good faith)
  • Market information
  • Price stabilisation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is meant by “Manipulating Transactions”?

Under the General Prohibitions for MAR

A

Effecting transactions/orders likley to give a false or misleading impression of the supply, demand or value of an investment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is meant by “Manipulating Devices”?

Under the General Prohibitions for MAR

A

Effecting transactions or orders to trade which employ ficticious devices or any other form of deception or contrivance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

info Iraj

What is meant by “Dissemination”?

Under the General Prohibitions for MAR

A

Dissemination of information likley to give a false or misleading impression of an investment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Andrew GG

What is meant by “Benchmark manipulation”?

Under the General Prohibitions for MAR

A

Transmitting information likley to give a false or misleading impression of, or that manipulates the calculation of a benchmark.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Who should the Issuers managers notify, of own account transactions relating to their issuer?

A

The issuer and the FCA.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

For managers transactions, which securities fall into scope and need to be reported?

A
  • Shares
  • Debt instruments
  • Related derivatives
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is meant by a “Closed Period”?

In relation to managers transactions

A

A further restriction on conducting own account transactions in their issuers shares during a closed period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is the duration of the “Closed Period”?

A

30 calendar days before the announcement of interum or financial reports.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What are the 3 stages of the Money Laundering process?

A
  • Placement
  • Layering
  • Integration
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

What is the POCA 2002?

A

The proceeds of crime act

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

What are the offences under the proceeds of crime act?

There are 5

A
  • Concealing: Conceal or disgiuse criminal property
  • Arrangements: Being concerned in an arrangement
  • Acquisition, use and possesion
  • Failure to disclose: Know or suspect a person is laundering money / Information is obtained / Disclosure is not made as soon as practicable
  • Tipping off
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Who is one to report the offences under the POCA 2002 to?

ML

A

Money Laundering Reporting Officer (MLRO)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What are the 3 main control requirements for firms in relation to money laundering?

ATP?

A
  • **Adminstrative: ** ID procedures, internal reporting for suspicions
  • Training: Train staff to recognise suspicious transactions
  • Preventative: Internal controls to identify and prevent money laundering
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

What is the consequence for failing to comply with the systems and controls in relation to Money Laundering?

A

Criminal offence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

What is the JMLSG?

A

Joint money laundering steering group

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

What is the purpose of the JMLSG?

A

The purpose is to give guidance to those who set the firm’s risk management policies and its procedures for preventing money laundering and terrorist financing.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

What are the 3 aspects of KYC?

Under JMLSG?

A
  • ID the customer: Name, adress, DOB
  • Verify the information
  • Obtain information about the intended nature for the relationship
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

As soon as reasonable what?

When should evidence of identity be obtained?

Under JMLSG

A

“As soon as reasonable practicable” after the first contact between the firm and the customer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

What should a firm do if the indentity of a potential client cannot be obtained?

A
  • DO NOT PROCEED
  • Consider a report to the National Crime Agency (NCA)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Why is enhanced due dilligence for PEPs nessecary?

A

As politically exposed persons are entrusted with prominent functions, are more secceptable to money laundering, bribery etc.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

What are the AML FCA requirements for firms?

Appoint a what, and do what

A
  • Appoint a money laundering reporting officer (MLRO)
  • Give a director or senior manager (who may be the MLRO) overall responsibility for effective anti-money laundering systems and controls.
  • Establish systems and controls to identify, assess, monitor and manage risk.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

What must a firm do internally to comply with FCA AML rules?

A
  • Train employees in relation to ML
  • Provide information to directors and senior management (Including at least annual reports by the MLRO)
  • Document ML policies
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

How often is the MLRO expected to produce an AML report?

A

At least once annually

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Is it a criminal offence to fail to disclose any suspicion of terrorist activity?

A

YES!

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

What are the two differences between ML and terrorist financing?

A
  • Often, quite small sums of money are require to commit terrorist acts
  • If legitimate funds are used to finance terrorism, then it is hard to decide hen the funds becomae terrorist property
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

What are the FOUR offenses under the Bribery Act 2010?

Offer, asking, doing, failing

A
  • Offering, promising or giving a bribe to another person
  • Requesting, agreeing to receive or accepting a bribe from another person
  • Bribing a foreign public official
  • The corporate offence of failing to prevent bribery
43
Q

What are the penalties to both individuals and corporates under the Bribery Act 2010?

A
  • Individuals: 10 years imprisonment
  • Corporate offences: Unlimited fine
44
Q

What do the Disclosure and Transparency Rules cover mainly?

A

Inside information

45
Q

What is the Purpose of the DTR?

A
  • Promote prompt and fair disclosure of relevant information to the market
  • Set out specific circumstances for the delayed disclosure of inside informations
  • Set out requirements to ensure such info is kept confidential “DENY ACCESS” to protect investors and prevent insider dealing
46
Q

What must an issuer of information have in place to prevent breaches of confidentiality?

A
  • An issuer must have measures in place to enable public disclosure via an Regulatory Information Service, where the issuer is unable to ensure the confidentiality of inside information.
47
Q

What is an RIS?

A

Regulatory information service

48
Q

What are the 2 sections of the “Disclosure Rules”?

A
  • Information on significant stakes should be made availible to the investing public
  • Disclosure allows existing and potential shareholders to assess the company with full knowledge of significant shareholdins
49
Q

What are the thresholds for notification of holdings under the EU transparency directive

%

A

Holdings that reach, exceed or move below - 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75%

50
Q

Under the EU Transparency Directive, who must be notified when holidings pass or reach a certain level, and by what time?

A
  • Shareholder must notify the issuer (within 4 days)
  • Issue must notify the market (immediatley)
51
Q

What are the SEC rules for who must be notified when holidings pass or reach a certain level, and by what time?

A
  • Notification threshold: 5%
  • Acquirer must notify the issuer and the SEC within 10 days
52
Q

What is meant by “Super-Equivalence” in relation to the EU directive?

A

The UKLA disclosure rules exceed that of the EU, so they do not need to be harmonised

53
Q

What are the notifiable interests for disclosure with the UKLA?

What disclosure is required when a holding reaches…..?

A
  • Reaches 3%
  • (Once above 3%) goes up or down to the next whole %
  • Falls below 3%
54
Q

Do the UKLA Disclosure Rules include shares held by connected parties? If so Who?

A

Yes
* Investors spouse
* Investors children less than 18 y/o
* Companies controlled (at least 1/3 voting right by the investor)
* Concert parties (who can get together)

55
Q

What types of shares are disregarded by the UKLA Disclosure Rules?

There a 6

A
  • Acquired for clearing and settlement (within a 3 day period)
  • Held by a custodian or bare trustee
  • Held (if less than 10%) by a market maker
  • Helf (if less than 5%) by an investment firm
  • Held as collateral
  • Acquired for stabilisation as long as voting rights exercised
56
Q

What is the maximum holding for shares held by a Market Maker, in order for them to be disregarded by the UKLA Disclosure Rules?

A

Less than 10%

57
Q

What is the maximum holding for shares held by a Investment Firm, in order for them to be disregarded by the UKLA Disclosure Rules?

A

Less than 5%

58
Q

For shares disregarded by the UKLA Disclosure Rules, who needs to be notified of this and when by?

A
  • To the company within two business days
  • For a listed company to a primary information provider PIP, by the end of the following business day
59
Q

What are the rules surrounding the Companies Act Section 793 Letter?

Who responds?

A
  • Can request confirmation of past shareholders held at any time in the past 3 years
  • Id sent to a nominee company: the COMPANY SECRETARY RESPONDS
60
Q

What happens if a S793 letter is ignored?

A

Shares are FROZEN

61
Q

What is a Companies Act Section 793 Letter?

What does it mean?

A

Compnay requests disclosure via a written notice of a shareholders total interest in a company

62
Q

What is the Purpose of The Panel on Takeovers and Mergers (PTM) city code?

A
  • Framework within which takeovers are conducted
  • Ensure that shareholders are generally treated fairly
63
Q

How many POTAM Principles are there?

A

6

64
Q

What is Principle 1 of POTAM?

Communist?

A

All holders or securities of the same class must be affiorded equivalent treatment.

65
Q

What is Principle 2 of POTAM?

Time and info

A

Holders of the securities of the offeree must be given suffucient time and info to form a properly informed decision on the bid.

66
Q

What is Principle 3 of POTAM?

A

The board of the offeree must act in the best interest of the company as a whole

67
Q

What is Principle 4 of POTAM?

Fufu lame shiiiii

A

No false markets in the securities of the oferree created.

68
Q

What is Principle 5 of POTAM?

No time wasters

A

An offeror must announce a bid only after ensuring s/he can fulfil any cash considerations

69
Q

What is Principle 6 of POTAM?

Not hindered

A

An offeree company must not be hindered in the conduct of its affairs for longer than is reasonable by a bid for its securities

70
Q

What are provisions under the City Code for persons “Acting in Concert”?

A
  • A company and other group of companies
  • A company and its directors
  • A company and its pension fund
  • A fund manager and discretionary managed investment vehicles
  • A client and its professional advisers
71
Q

What is a TRP?

A

Trade reporting period.

72
Q

What briefly is the defintion of Trade reporting?

D channel

A

Feedback to the market place on market depth and liquidity (Price discovery)

73
Q

What is Transaction (or “settlement”) reporting?

Provides info to who

A
  • Facilitates settlement
  • Provides info to regulators
74
Q

What is the UK SFTR Jan 2021?

A

The UK securities finance transaction regulation

75
Q

What does the UK SFTR do?

A
  • Set reporting requirements for securities finance transactions similar to derivatives transactions under EMIR
  • Limitations on the reuse of collateral
76
Q

What was the UK European Markets Infrastructure Regulation introduced to improve?

A

The transparency and reduce some of the risks associated with the OTC derivatives markets.

77
Q

What are the main requirements for UK EMIR?

There are 2

A
  • Reporting obligation for OTC derivatives: all trades regsitered with a TR (trade repository)
  • Central counterparty for all OTC derivatives trades: greater market safety by reducing counterparty and operational risks
78
Q

When are trades expected to be reported for order book transactions?

A

Automatically and immediatley

79
Q

When are trades expected to be reported for OFF-order book transactions?

Quote driven trading, what times for what?

A

Trades 7:15-8:00AM: Report by 8AM
Trades 8AM to 5:15 PM: Report within 3 minutes
Trades after 5:15 PM: Report by the start of the next TRP

80
Q

When is the Trade Reporting Period?

A

7:15AM to 5:15PM

81
Q

Which individual reports the trade?

A
  • The most senior member
  • Or the selling member when both at the same level
82
Q

What is the DOL?

What do they publish?

A

Stock exchange daily official list, publish all trade reports

83
Q

What are the “Transaction Reporting” deadlines for domestic tranactions (CREST) and international transactions (Omgeo DTCC)?

A
  • Domestic: by 8:00PM
  • International: by 9:00PM
84
Q

What are the Data Protection Principles

A
  • Processing must be lawfully and fair
  • Purposes of processing must be specific, explicit and legitimate
  • Personal data must be adequate, relavent and not excessive
  • Personal data must be accurate and kept up to date
  • Personal data must be kept for no longer than is necessary
  • Personal data must be processed in a secure manner
85
Q

What

What are the legal responsibilities for firms under the Data Protection Act (2018)?

ICO?

A
  • Notifying the ICO that they are processing information
  • Processing personal info in accordance with the data protection principles.
86
Q

What party reports when transaction reporting?

Not the same as trade reporting

A

Both parties to the trade

87
Q

Who do all entites classified as data controllers have to register with?

A

The ICO

88
Q

What is the “Higher Maximum Penalty” for GDPR breaches?

A
  • Failure to comply with data protection principles: greater of £17.5m or 4% annual turnover
89
Q

What is the Scope of the GDPR?

A

Applies to data controllers and data processors

90
Q

What is the “Standard Maximum Penalty” for GDPR breaches?

A
  • Standard maxiumum (breach of other provisions): greater of £8.7m or 2% of annual worldwide turnover
91
Q

What is GENPRU?

What does it mean?

A

The General Prudential Sourcebook: High level standards, principles and capital adequacy requirements for firms that are subject to the Capital Requirements Directive (CRD)

92
Q

What is Pillar 1 of the Capital Requirements Directive (CRD)?

Minimum

A

Minimum capital requirements for credit, market and operational risks.

93
Q

What is Pillar 2 of the Capital Requirements Directive (CRD)?

more CAPITAL!!!!??

A

Firms and supervisors decide whether additional capital should be held to cover risks not covered in pillar 1

94
Q

What is Pillar 3 of the Capital Requirements Directive (CRD)?

Be honest!

A

Disclosure of infromation about risks, capital and risk management to improve market discipline.

95
Q

What is Core Tier One capital?

What are the examples of this?

A

Permanent share capital, reserves, externally verifies interim profits.

96
Q

What is Tier Two capital?

What are exmaples of this?

A

Long-term subordinated debt and revaluations reserves.

97
Q

What is Tier Three capital?

What are exmaples of this?

A

Short term subordinated debt and interim trading book profit and loss

98
Q

What is the rule with Tiers of capital?

Relationship

A

As the tiers get higher, the time in which the instrument is held decreases.

99
Q
A
100
Q

What is MiFIDPRU?

A

The Prudential Sourcebook for UK MiFID Investment firms

101
Q

What is the Purpose of MiFIDPRU?

When and why was it introduced?

A

The new prudential requirements, which came into effect on 1 Jan 2022, and apply to UK regulated firms which are subject to MiFID.

102
Q

What do the Interim Prudential Sourcebook for Investment Businesses (IPRU INV) set?

If youre not regulated by pretty much everything else

A

Capital adquacy rules for investment firms, which are not subject to the CRD and CRR and are also not subject to the “MiFIDPRU” rules/sourcebook

103
Q

What were the enhancements made to MiFID when MiFID II was released?

A
  • Expanded the authorisation requirement and instruments covered
  • Extended electronic trading venues, to cover new regulatory OTFs
  • Transparency and trade reporting introduced for bonds and derivatives
104
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