Chapter 6 Flashcards
What is General Prohibition?
Regulated activities can only be carried out by someone who is authorised or exempt. Otherwise this is a criminal offence
What are the 3 groups who have exempt status?
1 - Bodies
BoE, ECB, local authorities etc.
2 - Companies
DPB firms - lawyers, accountants, chartered surveyors, actuaries etc.
3 - Individuals / Firms
Appointed Representative Firms are exempt if an authorised person takes responsibility
FCA must be notified of any AR contract terminations so can remove from register
Difference between authorised person and approved person?
Authorised is business who carry out regulated activities
Approved is individual who carries out controlled function
What is a controlled function?
Those whose rules involve a significant influence on the conduct of authorised persons affairs and dealing with customers in relation to regulated activities
How are firms divided under SM&CR?
Senior Managers and Certificate Regime
1 - Core
Most firms
Default
2 - Limited Scope
Usually small firms like sole traders and authorised professional firms
3 - Enhanced
Largest, riskiest and most complex firms (around 350) with biggest consumer impact
What are the pillars under SM&CR?
1 - Senior Managers Regime
2 - Certification Regime
3 - Conduct Rules
What is Senior Management Regime?
Statements of Responsibility, Prescribed Responsibilities and Duty of Responsibility
Also Responsibility Maps, Handover Procedures and Overall Responsibility apply to enhanced firms
What is Certification Regime?
Applies to non SM employees who have significant role on consumers, firm and market integrity
Onus is on firm not regulator to assess and approve such individuals
Annual certification, CR limits and responsibility of CR
What are conduct rules?
Tier One - apply to most employees bar ancillary staff
Tier Two - SM
Breaches must be reported to FCA within 7 days
What are the 3 stages of money laundering?
Placement
Layering
Integration
What is the law to prevent money laundering?
Proceeds of Crime Act (POCA) 2002
Illegal to:
Conceal, disguise, convert or transfer criminal property
Assist in acquisition, retention and control of criminal property
Acquire or use criminal property
Fail to disclose suspicion or tip of launders
Who puts anti-money laundering policies into place?
Money Laundering Reporting Officer (MLRO) acts as a central point and may report to NCA
How long must customer due diligence be kept for?
5 years after the end of customer relationship or after the transaction
What are the training procedures for anti-money laundering?
Annual training and report by MLRO
2 year sentence for breaking these rules
Who oversees compliance with Data Protection Act and GDPR?
The ICO
Who must be appointed in relation to data protection?
A Data Protection Compliance Officer must be appointed since GDPR and 2018 Data Protection Act
Must ensure the authorised person complied with various data protection principles
This is both controller and processor
What is the difference between a controller and processor?
Controller - Stipulates how and why data is processed
Processor - Acts on behalf of controller to keep record of data
Controller can’t pass on responsibility to any processor
What are requests for data known as?
Subject Access Requests (SAR)
Individuals asking for information about them self - receive within a month
Can be a charge but rate
Need to supply evidence if changed
What categories is data split into and give examples?
Personal - Name, Address, Occupation, Salary, DOB, Gender, Contact Details, Training and Qualification Records
Sensitive - Ethic origin, sexual orientation, physical or mental health, criminal record and any political or trade union affiliations
What rules apply to use of individual data?
Strict rules - can’t be used for marketing
Who does the responsibility for T&C of staff rest with?
Authorised person
What are the 3 stages of T&C?
1 - Initial recruitment
2 - Competence
3 - Appropriate Examinations held
What training must cover individuals dealing with retail clients?
Market
Legislation
Regulatory
Product changes and updates
How long must details of training be kept for?
3 Years - Non-MIFID
5 Years - MIFID, Life Policies and Pension Contracts
6 Years - Promotions of Life & Pension Materials
Indefinitely - Pension Transfer Specialists, Pension Opt Outs & FSAVCs
Kept from end of employment
What qualification must be held to give investment advice?
Level 4 qualification
Without you cannot provide advice
What level must a supervisor be?
Must hold an equivalent qualification to the individual they are supervising
What elements make up a T&C scheme?
Initial Competence
Review Competence
Adequate Record Keeping
What information is required by FCA returns and how regular are they done?
Sent via GABRIEL system
Details of shareholdings and controls of firm:
Staff Turnover & Structure
Close links information
Financial Resources
Complaints
Depends on type of information but complaints are reported twice a year
How are FCA notification requirements broke down?
1 - Immediate
Significant Regulatory Impacts
Serious Crime
Major breach of Authorisation
Insolvency
Incorrect information provider to regulator
2 - Reasonable Advance Notice
Changes to address, name or numbers
Who must complaints be directed to?
Straight to IFA
Financial Advisors authorised person if restricted
What is an eligible complainant?
Consumer
Smaller businesses & charities etc.
What are the complaint handling times?
Written acknowledgment - 5 working days - can refer complaint if believe another firm is solely responsible
Progress Reports - 4 weeks and written final decision in 8 weeks - advised of the right to complain to FOS within 6 months
What are the relevant timescales for referring a complain to FOS?
6 months after authorised persons final response
6 years after complaint event
3 years after the complainant knew or should have know to complain
What are the maximum monetary awards that FOS can enforce?
£355,000 - After 1st April 2020
£350,000 - Between 1st April 2019 to 31st March 2020
£160,000 - Before 1st April 2019 but referred after
£150,000 - Before 1st April 2019
Interest + Costs also added on
What are the maximum compensation limits that FSCS can enforce?
FSCS - companies going to default
Deposits, Investments & Mortgage are 100% capped at £85,000 - per person & per firm
General Insurance - no limits
Compulsory - 100%
Non Compulsory - 90%
Long-term Insurance - no limits
Product provider - 100%
Intermediary - 90%
What protections are in place for members of pension schemes?
Pensions Advisory Service
Pensions Ombudsman
Pension Protection Fund
Fraud Compensation Scheme
