Chapter 6 Flashcards
What is PRIN?
Principles for Business
- general statement of main regulatory obligations of firm.
SYSC
Senior Management Arrangements, Systems and Controls
What is SYSC?
Rules and guidance on how key responsibilities for managing the business should be allocated among the firm’s senior management team and the systems and controls the firm should have in place.
COCON
Code of Conduct
COND
Threshold Conditions
- minimum standards the firm must satisfy to become and remain authorised by the FCA
APER
Statements of Principles and Code of Practice for Approved Persons
APER- detail
Sets out the conduct requirements for approved persons. Primarily people carrying out senior or client facing function not covered by senior management and certification regime.
FIT
Fit and Proper Test for Employees and Senior Personnel
- for senior management or certified functions
FINMAR
Financial Stability and Market Confidence
+ short selling
T&C
Training and Competence
- detailed competence requirements e.g. exams
GEN
General Provisions
- underlying legal framework to FCA regs and requirments regarding statutory status disclosure
FEES
Fees Manual
- fees provisions for funding FCA, FOS, FSCS and MaPS
MaPS
Money and Pensions Service
FSCS
Financial Services Compensation Scheme
FOS
Financial Ombudsman Service
COND 2.2
Location of offices
- HQ must be in UK.
COND 2.3
Effective Supervision
- Must be capable of of being effectively supervised by FCA
- No interfering ‘close links’
COND 2.4
Appropriate Resources
- Appropriate and adequate resources in relation to their regulated activities, accounts for membership of groups, provisions of liabilities, management of risk.
COND 2.5
Suitability
- Person must satisfy FCA that they are a fit and proper person having regard to all the circumstances, including their connection with any person; the nature of any regulated activity that they carry on or seek to carry on; and the need to ensure that their affairs are conducted soundly and prudently
COND 2.7
Business Model
- must be suitable in relation to person carrying out the regulated activities they carry out or seek to carry out.
Senior management arrangements (SYSC 2)
Appoint individuals to be personally responsible for senior management, CEO or equivalent has overall responsibility.
Systems and controls (SYSC 3)
should have systems and controls appropriate to its business.
i.e nature and size, risks associated. must be regularly reviewed.
General organisational requirements (SYSC 4)
must have robust governance including clear structure and reporting lines, system for identification and management of risks, appropriate administrative, accounting and information systems.
experienced and reputable management, appropriate management practices, allocation of responsibility.
Employees, agents, and other relevant persons (SYSC 5)
Employees must have appropriate skills, knowledge to carry out their functions.
Compliance, internal audit and financial crime (SYSC 6)
appropriate policies and procedures to comply with regulations proportionate to nature and scale of firm’s activities.
- Independent internal audits
systems and controls to identify and manage money laundering and other financial crimes
Risk control (SYSC 7)
establish and maintain adequate risk management policies and procedures to identify risks to firm’s activities.
establish level of risk firm is prepared to tolerate.
Outsourcing (SYSC 8)
appropriate measures to avoid undue additional operational risks arising through outsourcing. Not to be undertaken where it affects internal controls and prevents FCA from monitoring compliance.
Record-keeping (SYSC 9 )
Arrange for orderly records of business and internal organisation. Including all services and transactions. Must be sufficient to enable FCA monitoring and ensuring firm has complied with obligations to clients.
