FSMA 2000 & Financial Services Act 2012 Flashcards
1
Q
Exemptions from General Prohibition
A
- SECTION 39 & FSMA (APP REPS) REGS 2001
- SECTION 285 FSMA - RIEs & RCHs
- SECTION 312A - for operators of multilateral trading systems, exercising certain rights.
- SECTION 316 FSMA - provisions for members of Society of Lloyds.
- FSMA EXEMPTION ORDER 2001 - central banks, supranational bodies, local authorities, charities, industrial& provident societies, certain organisations subject to some Government oversight.
- PART 20 FSMA - Special regime for professional firms
2
Q
Exempt Persons (General Prohibition)
A
- Appointed Representatives
- Recognised Investment Exchanges (RIE)/ Recognised Clearing Houses (RCH)
- FSMA Exemption Order 2001 - supranational bodies
- central banks (except effecting/carrying out contracts of insurance)
- municipal banks, local authorities, charities but only from accepting deposits. - Members of Lloyds
- Members of the Professions
3
Q
Part 4A Permission Threshold Conditions
A
- Legal Status
- Location of Offices - Co’s est. under UK law must have registered/head offices in UK.
- Business to be Conducted in Prudent Manner - appropriate resources
- Effective Supervision (including existing close links condition)
- Appropriate Resources
- Suitability - firm must prove itself fit & proper.
- Business Model
- Appointment of Claims Rep - only for motor insurers.
4
Q
Controlled Functions
A
- Governing Functions - directing affairs of biz.
- Required Functions - e.g. compliance oversight, MLRO
- Systems & Control Function - responsible for reporting to Board on financial affairs, risk exposure, adherence to internal systems & controls.
- Significant Management Function - responsibility for significant business unit.
All above are Significant Influence Functions.
- Customer Function - not a SIF
5
Q
PRA Functions
A
SMF functions for UK Relevant Firms
- Chief Executive
- Chief Finance
- Chief Risk
- Head of Internal Audit
- Head of Key Business Area
- Group Entity Senior Manager
- Credit Union SMF (small credit unions only)
- Chairman
- Chair of Risk Committee
- Chair of Audit Committee
- Chair of Remuneration Committee
- Senior Independent Director
- Chief Operations
For Incoming Branches of Foreign Banks
- Chief Finance
- Chief Risk
- Head of Internal Audit
- Group Entity Senior Manager
- Head of 3rd Country Branch/Head of Overseas
- EEA Branch Senior Manager
6
Q
PRA Functions
A
SMF functions for UK Relevant Firms
- Chief Executive
- Chief Finance
- Chief Risk
- Head of Internal Audit
- Head of Key Business Area
- Group Entity Senior Manager
- Credit Union SMF (small credit unions only)
- Chairman
- Chair of Risk Committee
- Chair of Audit Committee
- Chair of Remuneration Committee
- Senior Independent Director
- Chief Operations
For Incoming Branches of Foreign Banks
- Chief Finance
- Chief Risk
- Head of Internal Audit
- Group Entity Senior Manager
- Head of 3rd Country Branch/Head of Overseas
- EEA Branch Senior Manager
7
Q
FCA Functions
A
SMF functions for UK Relevant Firms
- Executive Director
- Chair of Nominations Committee
- Chair of With-Profits Committee
- Compliance Oversight
- Money Laundering Reporting
- Other Overall Responsibility
- Chief Actuary
- With-Profits Actuary
- Chief Underwriting Officer
- Underwriting Risk Oversight (Lloyds)
- Conduct Risk Oversight (Lloyds)
- Small Insurer Senior Management
- Head of Small Run-Off Firm
- Partner
For Incoming Branches of Foreign Banks
- Executive Director
- Compliance Oversight
- Money Laundering Reporting
- Other Local Responsibility (UK branches of non-EEA banks & of non-EEA insurers only)
8
Q
Statutory Notices
A
- Warning - proposed action & why. Right to make representations. FCA can publish details to signal start of enforcement proceedings but must consult with recipient first.
- Decision - action FCA has decided to take. Recipient can appeal.
- Supervisory - details of action FCA has decided on/proposed.
Following notices are not statutory:
• Notices if Discontinuance - not proceeding with action.
• Final Notices - final action & effective date. Published on FCA website but only with recipient approval.
9
Q
Regulators Powers to Require Info & Appoint Investigators
A
SECTION 165 FSMA - Can request info from Auth firms, RIEs, RCHs, within reasonable time period.
SECTION 166 FSMA - obtain reports from ‘skilled persons’ (3rd party) if FCA has concerns.
SECTION 166A FSMA - skilled person appointed to collect & update info.
SECTION 167 FSMA - regulator request firm appoint competent person(s) to provide reports e.g. solicitors, accountants.
SECTION 168 FSMA - regulator appoints competent person(s) to investigate firm.
10
Q
Specified Investments
A
- Deposits - excluding advance payment for goods/svs, money paid as security deposit.
- Electronic Money
- Rights Under Contracts of Insurance
- Shares
- Debentures, instruments creating/ acknowledging indebtedness - excludes trade bills, cheques, other bills of exchange.
- Government & public securities
- Warrants
- Certificates representing certain securities
- Units in a CIS
- Rights under a stakeholder pension scheme
- Rights under a personal pension scheme
- Options
- Futures - excluding for commercial purposes
- Contracts for Differences
- Lloyds Syndicate Capacity & Syndicate Membership
- Rights under a funeral plan contract
- Rights under a regulated mortgage contract*
- Rights under a home reversion plan*
- Rights under a home purchase plan*
- Rights under a regulated sale & rent-back agreement*
- Credit agreements
- Consumer hire agreement
- Greenhouse gas emission allowance
- Alternative finance investment bonds/ alternative debentures
- Home finance transactions
11
Q
Regulated Activities
A
- Accepting deposits
- Issuing e-money
- Effecting or carrying out contracts of insurance as principal
- Dealing in Investments as principal or agent
- Arranging (bringing about) deals in Investments
- Arranging regulated mortgage contracts & making arrangements with view to regulated mortgage contracts
- Arranging home finance transactions
- Operating a MTF
- Operating an OTF
- Bidding in emission auctions
- Credit Broking - activities re entering forms of consumer credit as lender
- Operating an electronic system re lending - activities relating to consumer credit
- Managing Investments
- Assisting in administration & performance of a contract of insurance
- Activities in relation to debt (consumer credit)
- Safeguarding & administering Investments
- Advising on Investments
- Sending dematerialised instructions & allowing dematerialised instructions to be sent - e.g. CREST
- Managing a UCITS; Acting as trustee or depository of UCITS; Managing a AIF (Auth/unauth) & establishing, operating, winding up a CIS
- Establishing, operating, winding up pension scheme (stakeholder & personal pension)
- Providing basic advice on stakeholder products
- Lloyds market activities
- Entering into funeral plan contract
- Advising on home finance transactions
- Regulated credit agreements
- Agreeing to carry on specified kinds of activity
