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R01 > Chapter 5B > Flashcards

Chapter 5B Flashcards

1
Q

How many blocks are there in the FCA handbook?

A

9 Blocks

Block 1 - High Level Standards
Block 2 - Prudential Standards
Block 3 - Business Standards
Block 4 - Regulatory Process
Block 5 - Redress

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2
Q

What does Block 1 involve?

A

Standards applying to all firms and approved persons (controlled functions)

Minimum standards to retain Part 4a permission

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3
Q

What is PRIN?

A

11 general rules about principles of business

Standards of behaviour applicable to individuals, firms and markets around how they do business

Relates to every individual with Part 4a permission

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4
Q

What is SYSC?

A

Systems and Controls

Split up into over 20 subsections

Rules and guidance on systems and controls required and how senior management should approach them

One size does not fit all - adequate structure of systems and controls for their business

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5
Q

What is COND?

A

The minimum standards individuals, firms and markets must satisfy to become and remain FCA authorised

5 conditions - location, effective supervision, appropriate resources, suitability and business model

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6
Q

What is APER?

A

Approved Persons Rules

Behaviour and standards expected by FCA of individuals within appointed representative or non SM&CR firm

Subject to 11 principles of business and 7 approved person principles

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7
Q

What is FIT?

A

A senior manager or individual subject to Certification must be fit and proper

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8
Q

What is COCON?

A

Rules that relate to individuals under SM&CR

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9
Q

What is FINMAR?

A

Rules relations to firms financial stability, market confidence and short selling

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10
Q

What is TC?

A

Training and Competency

Requirement concerning staff competence within an authorised firm or market

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11
Q

What is GEN?

A

The legal framework of FCA regulation in relation to status disclosure

Customers must know the status of the advisor

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12
Q

What is FEES and what are the 3 types?

A

Framework for funding FCA, FOS, FSCS and MaPS - paid in advance

1 - Application
£1,500 for basic but increases
Variation to new block - 50%
Variation in same block - £250

2 - Periodic Fees
Day to day FCA costs
Each fee block has a tariff based
Periodic fee = firms tariff base (such as annual income) x fee-block rates

  1. Special Project Fees
    Special requested - mergers, demutualisation etc.
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13
Q

What does Block 2 involve?

A

Prudential requirements for firms - capital reserves, frequency of stress tests and reporting requirements

PR in all abbreviations

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14
Q

What is GENPRU?

A

Prudential sourcebook for banks, building societies, insurers and investment firms

GENPRU1
Adequate resources - capital and liquidity

GENPRU2.1
Minimum capital a firm must hold (CRR)

GENPRU2.2
Types of eligible capital - permanent (company shares), not permanent (preference shares) and short term debts

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15
Q

What is BIPRU?

A

Calculation factors regarding risk

Capital Reserves Requirement

Capital adequacy reports must be submitted twice a year

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16
Q

What is IFPRU?

A

Prudential sourcebook for larger investment firms

Capital requirement that investment firms need in place - Capital Requirement Directive IV

Affects capitals level, reducing counterpart credit credit and reserves buffers

17
Q

What is MIPRU?

A

Prudential sourcebook for mortgage, home finance firms and insurance intermediaries

Financial safeguard rules, capital requirements and PII requirements

18
Q

What is IPRU-INV?

A

Prudential and notification requirements for non-BIPRU investment firms

Same as MIPRU but simpler investment firms

19
Q

What is INSPRU?

A

Sourcebook for insurance companies and UCITS (types of investment) firms

20
Q

What is IPRU-FSOC / IPRU - INS?

A

Sourcebook for friendly societies and insurance companies

21
Q

What is COBS?

A

Conduct of business applying to individuals, markets and firms

Covers day to day rules on how to deal with customers - must take reasonable steps to ensure inducements are not offered to customers

22
Q

Can commission payments to advisors increase in line with greater volumes?

A

No this is forbidden under COB rules

23
Q

What gifts are allowed to intermediaries?

A

Inducements are not allowed

Gifts, extras and indirect benefits are permitted given they are reasonable - records kept for 5 years

24
Q

What is ICOBS?

A

Insurance Conduct of Business Sourcebook in 2005

Standards for conducting general insurance, pure protection and PPI business

Simpler advice process with no requirement for fact find or suitability report - demands and needs statement instead

25
Q

What is MCOBS?

A

Mortgage Conduct of Business Sourcebook - 2004

Resulting of MMR - advice must be given to all customers purchasing regulated home loans

Affordability must always be checked

Mortgage Credit Directive - new disclosure methods, additional 7 day cooling off period and new BTL consumer categories

26
Q

What is CMCOBS?

A

Claims Management Code of Business Sourcebook

Drive up standards of conduct

Protect and empower consumers

27
Q

What is CASS?

A

Clients Assets & Money

Clients assets must be segregated from the firms

Nominee bank account is used to protect clients funds from creditors

28
Q

When must monies be deposits into a client account?

A

By next working days close of business

29
Q

What is CASS resolution pack?

A

Contains info on firms client monies in line with FCA client monies rules to promote a speedier return of client monies in the event of product provider failure

30
Q

What is Block 4?

A

Regulatory Processes

SUP - Supervision
Ensure firms comply with their requirements for Part 4a permission

DEPP - Decision Procedure and Penalties
Reactive and Proactive to civil and criminal offences

31
Q

What is Block 5?

A

Redress

DISP - complaints - FOS
CONRED - Redress - Arc Cru funds
COMP - compensation - FSCS

32
Q

What is a complaints commissioner?

A

Investigate complaints and report to relevant regulator

R01 (11 decks)

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