Chapter 5B Flashcards
How many blocks are there in the FCA handbook?
9 Blocks
Block 1 - High Level Standards
Block 2 - Prudential Standards
Block 3 - Business Standards
Block 4 - Regulatory Process
Block 5 - Redress
What does Block 1 involve?
Standards applying to all firms and approved persons (controlled functions)
Minimum standards to retain Part 4a permission
What is PRIN?
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
What is SYSC?
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
What is COND?
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
What is APER?
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
What is FIT?
A senior manager or individual subject to Certification must be fit and proper
What is COCON?
Rules that relate to individuals under SM&CR
What is FINMAR?
Rules relations to firms financial stability, market confidence and short selling
What is TC?
Training and Competency
Requirement concerning staff competence within an authorised firm or market
What is GEN?
The legal framework of FCA regulation in relation to status disclosure
Customers must know the status of the advisor
What is FEES and what are the 3 types?
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
- Special Project Fees
Special requested - mergers, demutualisation etc.
What does Block 2 involve?
Prudential requirements for firms - capital reserves, frequency of stress tests and reporting requirements
PR in all abbreviations
What is GENPRU?
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
What is BIPRU?
Calculation factors regarding risk
Capital Reserves Requirement
Capital adequacy reports must be submitted twice a year
What is IFPRU?
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
What is MIPRU?
Prudential sourcebook for mortgage, home finance firms and insurance intermediaries
Financial safeguard rules, capital requirements and PII requirements
What is IPRU-INV?
Prudential and notification requirements for non-BIPRU investment firms
Same as MIPRU but simpler investment firms
What is INSPRU?
Sourcebook for insurance companies and UCITS (types of investment) firms
What is IPRU-FSOC / IPRU - INS?
Sourcebook for friendly societies and insurance companies
What is COBS?
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
Can commission payments to advisors increase in line with greater volumes?
No this is forbidden under COB rules
What gifts are allowed to intermediaries?
Inducements are not allowed
Gifts, extras and indirect benefits are permitted given they are reasonable - records kept for 5 years
What is ICOBS?
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
What is MCOBS?
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
What is CMCOBS?
Claims Management Code of Business Sourcebook
Drive up standards of conduct
Protect and empower consumers
What is CASS?
Clients Assets & Money
Clients assets must be segregated from the firms
Nominee bank account is used to protect clients funds from creditors
When must monies be deposits into a client account?
By next working days close of business
What is CASS resolution pack?
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
What is Block 4?
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
What is Block 5?
Redress
DISP - complaints - FOS
CONRED - Redress - Arc Cru funds
COMP - compensation - FSCS
What is a complaints commissioner?
Investigate complaints and report to relevant regulator
