Core Regulatory Principles And Rules Flashcards
What is the maximum compensation the Financial Ombudsman service can award for complaints about firms that occurred after April 1st 2020?
£375,000.00
If a new insurance company wants to be regulated, which governing body must they apply to?
PRA
What does 4A permission set out in the FSMA refer to?
Applying to the FCA for direct authorisation to allow the firm to carry out the regulated activities they have applied for
What is required in order for a firm to remain exempt status?
It must be contracted to an authorised person responsible for their activities
What firms were automatically re-authorised?
Firms authorised under the Banking Act 1987, Insurance Companies Act 1982 and the Financial Services Act 1986
What is an appointed representative?
Where a firm has exempt status as it has a contract with an authorised person who is regulated who has excepted responsibility for their activities
What is an appointed representative?
Where a firm has exempt status and has a contract with an authorised person who has accepted responsibility in writing for their activities
What important bodies are exempt from FCA regulations?
Bank of England
Local authorities
Various government bodies
How often should a senior manager prove they are fit and proper?
Annually
Who do conduct rules apply to?
Everyone employed by the firm apart from ancillary staff
How many tiers of conduct rules are there and who do they apply to?
Tier 1 - apples to all
Tier 2 - apples to all senior managers only
What are the tiers of firms?
Core, limited scope and enhanced
If a principle terminates an AR (must be in writing) how many days do they have to notify the FCA?
They must notify the FCA within 10 days
How long must records be kept?
Indefinitely for pension transfer / opt outs
5 years life and pensions
5 years most other dates
3 years non MiFID
When must product providers report persistency to the FCA?
Annually for the first 4 years
How often must firms submit reports on complaints?
Twice a year
How many hours of CPD is required for an authorised person?
35 hours (21 must be structured)
How many additional hours CPD for a pension specialist?
Additional 15 years
A new entrant has _____________ to complete relevant exams.
48 months
What is meant by the general prohibition?
It is an offence to carry out regulated activities unless authorised or exempt
Are there any exempt bodies?
Yes, The Bank of England
Local Authorities
Various government bodies
What is an approved person?
An individual approved to carry out a controlled function
What are the three main categories of senior management functions?
Governing functions
Required functions
Systems and control functions
What is money laundering?
The process for when criminals turn illegally obtained money into apparently legitimate funds
What are the three stages of money laundering?
Placement
Layering
Integration
What is the financial action task force?
The global money laundering and terrorist watch dog. Uk and other countries come together to fight financial crime
What directives came into place to combat money laundering and introduced joint money laundering steering group guidance?
4th & 5th money laundering directives
When does a credit check need to be carried out?
When establishing a new business relationship
Carrying out occasional transactions money laundering suspicions
Terrorist financing suspicions
When may a simplified due diligence (SDD) check be carried out?
For low risk transactions
When may a enhanced CDD check be required?
When someone is a potentially political exposed individual, person is not present, anyone from a high risk country
What steps are included in the identification process?
Identify customer and
Verify ID
How does eIDV (electronic identity verification) work?
Matches client information imputed to details on a public database
What is a SAR?
Suspicious Activity Report
How often must a firm report review of AML systems?
Annually
How long should records of clients ID be kept for?
5 years after end of client relationship or 5 years after the transaction
If a firm has a serious data breach this must be reported to:
The Information Commissioner
What is the maximum fine for a data breach is:
£17 / €20 or 4% of global turn over whichever is the largest
How long does a firm have to settle a complaint?
8 weeks
What is FOS’s aim?
To resolve disputes quickly and minimum formality
To take a complaint to FOS what is the time frame?
8 weeks after initial complaint with firm
Within:
6 weeks of last communication with firm
6 years after the event occurred
3 years after claimant was given a reason to complain
How much compensation can FOS award?
£350,000 for complaints they can award more however firms are not obliged to pay more
How much are the limits for compensation that can be paid by FSCS?
Deposits, investments, home finance and SIPP provider £85,000
Insured personal pension provider, long term insurance 100% no limit
Intermediary insurance and general insurance 90%
What do the pension protection fund do?
Compensate members for eligible BD schemes where a firm insolvent and unable to pay benefits
Who are TPO?
The Pension Ombudsman mediator for pension complains
Under the Money Laundering Regulations what does Customer due diligence encompass?
Customer due diligence must be carried out when a regulated firm begins a business relationship with the customer. The verification of a customer’s identity must be sought along with the nature of the business relationship
If a regulated firm wants to move address when do they need to notify the FCA?
In advance of the address change
