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UK Regulation and Professional Integrity > Glossary > Flashcards

Glossary Flashcards

1
Q

What is aggregation

A

Multiple client orders are bulked together and processed as a single order. Customers must be notified of this procedure and its advantages and disadvantages.

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2
Q

What is allocation

A

The division of a single aggregated order between two or more investors’ accounts.

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3
Q

What is appointed representative

A

An appointed representative can be any type of person (ie, an individual or a company). It they must be a party to a contract with an authorised person that allows it/him to carry on certain regulated activities - and the authorised person must have accepted responsibility for the conduct of these regulated activities in writing.

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4
Q

What’s is approved persons (APER)

A

Individuals who are approved by the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA) to undertake controlled functions. These individuals are required to comply with the FCA’s Statements of Principle for Approved Persons and Code of Practice for Approved Persons. Due to the extension of the SM&CR, APER only applies to a limited number of firms.

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5
Q

What is the Financial Services and markets Act (FSMA 2000)

A

Authorisation
The Financial Services and Markets Act (FSMA 2000) requires firms to obtain authorisation prior to conducting investment business.Authorisation is gained by receiving one or more Part 4A Permissions from the FCA and/or the PRA.

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6
Q

What’s the Bank of England

A

The UK’s central bank which acts as the government’s banker and determines interest rates via its Monetary Policy Committee (MPC).

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7
Q

What’s the base rate

A

The minimum rate at which banks will lend money to individuals. In the UK, this is set by the Monetary Policy Committee (MPC) at the Bank of England (BoE).

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8
Q

What’s best execution

A

Firms take into account not only price factors, but also such issues as costs, speed, likelihood of execution and settlement, and all these in the light of the size and nature of the deal, in determining the means of obtaining the best outcome for a client when executing their deal.

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9
Q

What’s CGT (capital gains tax)

A

Tax paid on profits realised from selling assets. In the UK, there is an annual exemption limit. CGT is paid at the investor’s highest marginal tax rate, adjusted for losses and the holding period.

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10
Q

What’s Capital Requirements Directive (CRD)?

A

Formerly known as the Capital Adequacy Directive (CAD), this sets out the financial rules for financial firms. It came into force from 1 January 2007 and applies to banks, building societies and most investment firms. The CRD has been implemented in the UK. The aim of the CRD is to ensure that firms hold adequate financial resources and have adequate systems and controls to prudently manage the business and the associated risks.

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11
Q

What’s Certificate Regime?

A

This is part of the SM&CR. Individuals will not be approved by the regulators, rather they will be given a certificate by their firm to confirm they are ‘fit and proper’ to perform their role. The PRA and FCA have different criteria as to who is subject to the regime.

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12
Q

What’s Chinese walls

A

Organisational barriers to the flow of information set up in large firms, to prevent the movement of confidential sensitive information between departments and to manage any potential conflicts of interest.

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13
Q

What’s churning

A

Excessive trading by a broker in order to generate commission, regardless of the interests of the customer.

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14
Q

What’s a client

A

Individuals or firms that conduct business through an authorised person. Every client is either a customer (retail or professional) or an eligible counterparty.

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15
Q

What’s Client Assets

A

Securities or other assets held by a firm on behalf of its clients. The assets have to be kept separate (segregated) from the firm’s own assets.

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16
Q

What’s Code of Practice for Approved Persons

A

A code established by the FCA with regard to the behaviour of approved persons. Compliance with the code will be an indication of whether or not an approved person has complied with the Statement of Principles for Approved Persons.

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17
Q

What’s Collective Investment Scheme (CIS)

A

Open-ended funds such as unit trusts and open-ended investment companies (OEICs), also known as investment companies with variable capital (ICVCs).

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18
Q

What’s a Common Platform Firm

A

Firms subject to either of the Capital Requirements Directive (CRD) or the Markets in Financial Instruments Directive (MiFID II).

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19
Q

What’s a Compulsory Jurisdiction

A

The range of activities for which complaints fall compulsorily within the jurisdiction of the Financial Ombudsman Service (FOS).

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20
Q

What’s Conduct of Business Sourcebook (COBS)

A

Rules made by the FCA under the Financial Services and Markets Act (FSMA 2000) dealing mainly with the relationship between an authorised firm and its clients.

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21
Q

What’s the Conduct Rules

A

Conduct Rules
This is part of the SM&CR. The PRA and FCA approach will mean that all UK-based employees of relevant firms will be subject to high level conduct rules. There are additional conduct rules for individuals who are classified as performing a Senior Management Function (SMF) under the Senior Managers Regime.

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22
Q

What’s the Consumer Prices Index (CPI)

A

Measure of inflation used in the UK economy.
See also Harmonised Index of Consumer Prices.

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23
Q

What’s the Contracts of Insurance

A

Financial products specified by Part Ill of the Regulated Activities Order 2001, with two subdivisions: general and long-term insurance contracts.

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24
Q

What’s the Controlled Functions

A

Certain roles within authorised firms for which the FCA requires the occupant to be approved.
See Approved Persons.

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25
Q

What’s CREST

A

CREST
A recognised clearing house, CREST was the organisation in the UK that facilitated the clearing and settlement of trades in UK and Irish company shares, particularly in dematerialised form. As of
1 July 2007, CREST changed its operating and legal name to Euroclear UK & Ireland. The term CREST is still used for the clearing and settlement system itself.

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26
Q

What’s Criminal Justice Act (CJA) 1993

A

A substantial act which includes provisions relating to insider dealing, including a definition of that offence.

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27
Q

What’s Customer Function

A

The controlled function conducted by the who interact with a firm’s customers, such as an investment manager or an investment adviser.
See Approved Persons (APER).

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28
Q

What’s the Data Protection Act (DPA)

A

Legislation governing how personal data should be held and processed and the rights of access to it.

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29
Q

What’s Defined Benefit (DB) Pension Scheme

A

Final salary pension which is paid as a percentage of the employee’s final salary.

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30
Q

What’s the Designated Investment Exchange (DIE)

A

An overseas exchange designated by the FCA as meeting certain standards of investor protection in terms of such criteria as market efficiency, transparency and liquidity.

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31
Q

Whats the Designated Professional Body (DPB)

A

Professional bodies whose members are able to carry on limited financial services business without the need for authorisation from the
FCA, providing that the limited financial services offered to clients are incidental to their main business. These are the professional bodies for lawyers, accountants, chartered surveyors, licensed conveyancers and actuaries.

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32
Q

What’s Directives

A

Legislation issued by the European Union (EU) to its member states requiring them to enact and implement local legislation.

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33
Q

What’s Disclosure and Transparency Rules (DTR)

A

An FCA sourcebook; the rules apply to issuers of securities on certain markets.

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34
Q

What’s the aim of Disclosure and Transparency Rules (DTR)

A

The aim of the Disclosure Rules is, in part, to make provisions to ensure that information relating to publicly listed securities is properly handled and disseminated. The aim of the Transparency Rules, in part, is to implement the requirements of the Transparency Directive and to ensure there is adequate transparency of and access to information in the UK financial markets.

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35
Q

What’s Durable Medium

A

Paper or any instrument which enables the recipient to store information addressed personally to them in a way accessible for future reference for a period of time adequate for the purposes of the information.

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36
Q

What’s Eligible Counterparty (ECP)

A

A client that under the Markets in Financial Instruments Directive II (MiFID II) client categorisations is either a per se eligible counterparty or an elective eligible counterparty.

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37
Q

What’s European Economic Area (EEA)

A

The EEA is the 28 member states of the EU plus Norway, Iceland and Liechtenstein. From 1
January 2021 this will not include the UK.

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38
Q

What’s Exempt Persons

A

Exempt Persons
Firms exempt from the need to be authorised to carry on regulated activities. The term includes bodies such as recognised investment exchanges (RIEs) and recognised clearing houses (RCHs).

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39
Q

What’s Financial Conduct Authority (FCA)

A

Financial Conduct Authority (FCA)
The FCA replaced the Financial Services Authority (FSA) as the body responsible for regulating conduct in retail and wholesale markets; supervising the trading infrastructure that supports those markets and for the prudential regulation of firms not regulated by the Prudential Regulation Authority (PRA).

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40
Q

What’s Financial Conduct Authority (FCA) Handbook

A

Financial Conduct Authority (FCA) Handbook
The document containing the FCA rules and guidance, with which authorised firms must comply. It is divided into a number of separate sourcebooks covering different subjects.

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41
Q

What’s Financial Ombudsman Service (FOS)

A

Financial Ombudsman Service (FOS)
The body established to investigate and determine the outcome of complaints made by eligible complainants. The FOS can make awards, when appropriate, up to defined thresholds, plus costs.

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42
Q

What’s Financial Policy Committee (FPC)

A

Financial Policy Committee (FPC)
The new regulatory structure in the UK includes the FPC which is part of the Bank of England.
Its aim is to identify, monitor and take action to remove or reduce systems risk with a view to protecting and enhancing resilience of the UK financial system.

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43
Q

What’s Financial Resources Requirement (FRR)

A

Financial Resources Requirement (FRR)
The requirements as to the financial resources held by an FCA/PRA-authorised firm. The ERB is made up of primary and secondary requirements. The primary requirement addresses various standard sets of risks faced by a firm when undertaking business. The secondary requirement is set at the discretion of the FCA/PRA and covers its perception of the firm’s additional risk.

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44
Q

What’s Financial Services Act 2012

A

Financial Services Act 2012
The Financial Services Act 2012 is the primary legislation through the government-enacted reforms to the UK financial services regulatory structure. Its main role is to amend the Financial Services and Markets Act 2000 (FSMA) to establish the new regulators and to set out their additional powers. The new Financial Services Bill received Royal Assent on 19 December 2012.

45
Q

What’s Financial Services and Markets Act (FSMA) 2000

A

Financial Services and Markets Act (FSMA)
2000
The legislation that established the financial regulator (the FSA) and empowered it to regulate the financial services sector. The FSA was split in April 2013 - the FCA looks after conduct issues and the PRA looks after prudential issues.

46
Q

What’s Financial Services Authority (FSA)

A

The agency created by the Financial Services and Markets Act (FSMA 2000) to be the single financial regulator in the UK. In April 2013, it was split into two - the FCA looking after conduct issues and the PRA looking after prudential issues.

47
Q

What’s the Financial Services Compensation Scheme
(FSCS)

A

Created to provide a safety net for customers in the case of firms that have ceased trading, and cannot meet their obligations to them.

48
Q

What’s the Fit and Proper act of (FSMA 2000)

A

Under the Financial Services and Markets Act
(FSMA 2000), every firm conducting investment business must be fit and proper. The Act does not define the term; this is left to the FCA. This is also the minimum standard for becoming and remaining an approved person.

49
Q

What’s a Future

A

A futures contract is a legally binding arrangement by which parties commit to buy/ sell a standard quantity and (if applicable) quality of an asset from another party on a specified date in the future, but at a price agreed today.
Because the price is agreed at the outset, the seller is protected from a fall in the price of the underlying asset in the intervening time period (and vice versa).

50
Q

What’s a Gross Domestic Product (GDP)

A

Measures the amount of goods and services produced each year. GDP measures the products made in the UK.

51
Q

What’s Gross National Product (GNP)

A

Gross National Product (GNP)
GNP measures products and services made by UK companies worldwide.

52
Q

What’s Harmonised Index of Consumer Prices (HICP)

A

Harmonised Index of Consumer Prices (HICP)
Modern UK inflation indicator used by the Treasury as the formal yardstick. Also known in the UK as the Consumer Prices Index (CPI).

53
Q

What’s Her Majesty’s Revenue & Customs (HMRC)

A

Her Majesty’s Revenue & Customs (HMRC)
The government department responsible for the administration and collection of tax in the UK, and the guidance notes on HM Treasury’s rules for individual savings accounts (ISAs). HMRC is the result of the merger of two formerly separate departments, Her Majesty’s Customs & Excise and the Inland Revenue.

54
Q

What’s Home State

A

Home State
The term used for the European Union (EU) countrywhere financial services firm conducting cross-border business, within the EU, is based.

55
Q

What’s Host State

A

The term used for a European Union (EU) country in which a financial services firm is doing business from elsewhere.

56
Q

What’s Inside Information

A

Inside Information
Information relating to a specific security, or an issuer, which is not publicly known and which would affect the price of the security if it was made public.

57
Q

What’s Insider Dealing

A

Insider Dealing
One of several offences created under the Criminal Justice Act (CJA) 1993 which may be committed by an insider in possession of unpublished price-sensitive information if they attempt to deal in affected securities, encourages others to deal, or passes the information on.

58
Q

What’s Integration

A

Integration
The third stage of money laundering; integration is the stage at which the laundered funds appear to be of legitimate provenance.

59
Q

What’s Intercontinental Exchange (ICE) Futures

A

Intercontinental Exchange (ICE) Futures
Formerly known as the International Petroleum Exchange (IPE). One of six recognised investment exchanges (RIEs), ICE deals in futures for energy products, such as crude oil and gas, and also in new instruments such as carbon emission allowances.

60
Q

What’s Joint Money Laundering Steering Group (MLSG)

A

Joint Money Laundering Steering Group (MLSG)
A group whose membership is made up of 17 trade bodies in the financial services sector. The JMLSG has published guidance notes which set out how firms should interpret and implement the Money Laundering Regulations 2007. This guidance is not binding but, where there is a breach, compliance with the guidance is relevant to an enforcement court.

61
Q

What’s Layering

A

Layering
The second stage of money laundering, in which money or assets are typically passed through a series of transactions to obscure their true origin.

62
Q

What’s the London Metal Exchange (LME)

A

A recognised investment exchange (RIE). It is the market for trading contracts in base metals and some plastics.

63
Q

What’s the London Stock Exchange (LSE)

A

The dominant UK market for trading in securities, especially shares and bonds. The LSE is a recognised investment exchange (RIE).

64
Q

What’s the Market Makers

A

Market Makers
Firms which quote bid and offer prices for a named list of securities in the market. Such firms are normally under an obligation to make a price in any security for which it is market maker at all times.

65
Q

What’s the Markets in Financial Instruments Directive (MiFID)

A

Markets in Financial Instruments Directive (MiFID)
A European Union (EU) directive which replaced the Investment Services Directive (ISD) on 1
November 2007. It allows firms authorised in one member state to provide/offer financial services to customers in another member state, subject to some restrictions. It was repealed and replaced by MiFID II on 3 January 2018.

66
Q

What’s the Markets in Financial Instruments Regulation (MiFIR)

A

Markets in Financial Instruments Regulation (MiFIR)
A Regulation which came into effect alongside MiFID II on 3 January 2018, following a review of MiFID and as a response to the financial crisis of 2007-08. As a Regulation does not require member states to ‘transpose’, the new market infrastructure requirements (Pre-Trade and Post-Trade Transparency and the Systematic Internaliser Regime) are contained in the Regulation to ensure that there is a uniform application across member states.

67
Q

What’s the Misleading Statement

A

Misleading Statement
The term used for false information given about an investment, in order to (or with the effect of) affecting its value - a criminal act under Section
89-92 of the Financial Services Act 2012 and a potential form of market abuse.

68
Q

What’s the Monetary Policy Committee (MPC)

A

Monetary Policy Committee (MPC)
The committee chaired by the governor of the Bank of England which sets sterling interest rates.

69
Q

What’s Money Laundering (ML)

A

Money Laundering (ML)
The process whereby criminals attempt to conceal the true origins of the proceeds of their criminal activities, and to give them the appearance of legitimacy by introducing them into the mainstream financial system.

70
Q

What’s the Money Laundering Regulations 2017
(Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer)
Regulations 20171

A

the regulations under which authorised firms, and some other businesses, are required to comply with certain administrative obligations in order to prevent their firms/organisation from being used for money laundering.
The obligations include record-keeping, identification of clients and appointment of a nominated officer to receive suspicion reports, and staff training. Failure to comply may result in a fine and/or imprisonment. These came into effect from 26 June 2017.

71
Q

What’s Money Laundering Reporting Officer (MLRO)

A

Money Laundering Reporting Officer (MLRO)
A senior employee who is responsible for assessing internal suspicion reports, and, if these appear justified, reporting those suspicions to the National Crime Agency (NCA).

72
Q

What’s the Multilateral Trading Facility (MTF)

A

Multilateral Trading Facility (MTF)
An MTF is defined as a multilateral system, operated by an investment firm or a market operator, and which brings together multiple third-party buying and selling interests in financial instruments - in the system and in accordance with non-discretionary rules - in a way that results in a contract.

Operating an MTF is an investment service to which MiFID applies.

MTFs are required under MiFID to comply with organisational, transparency and market surveillance requirements that are similar to that apply to regulated markets (RMs).

73
Q

What’s the National Crime Agency (NCA)

A

The law enforcement agency to which suspicions of money laundering must be reported by a firm’s money laundering reporting officer (MLRO).

74
Q

What’s the Nominated Officer (NO)

A

Nominated Officer (NO)
A term for the officer who is required to receive a firm’s internal suspicion reports under Proceeds of Crime Act 2002 (POCA), the Terrorism Act and the Money Laundering Regulations; in practice, usually the same individual as the money laundering reporting officer (MLRO).

75
Q

What’s the Nominee

A

Nominee
The party which, under a legal arrangement, holds assets in its own name on behalf of the true beneficial owner.

76
Q

What’s the Open-Ended Investment Company (OIC)

A

Open-Ended Investment Company (OIC)
A collective investment scheme (CIS) constituted as an open-ended company. This means that its share capital can expand or contract to meet investor supply and demand. It is also referred to as an investment company with variable capital (ICVC).

77
Q

What’s an Option

A

Option
An option gives the holder the right (but not the obligation) to buy or sell a fixed quantity of an underlying asset on, or before, a specified date in the future. There are two basic types of option - puts and calls. The holder of a call option has the right to buy the underlying asset at a given price.
The holder of a put option has the right to sell the underlying asset at a given price.

78
Q

What’s an Organised Trading Facility (OTF)

A

Organised Trading Facility (OTF)
A multilateral system which is not an RM or an
MTF and in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact in the system in a way that results in a contract. Unlike RMs and MTFs, operators of OTFs will have discretion as to how to execute orders, subject to pre-transparency and best execution obligations. OTFs came into existence following the implementation of MiFID II in January 2018.

79
Q

What’s an Part 4A Permission

A

Part 4A Permission
The specific activity which an authorised firm is permitted to carry on. It is so called because Part 4A permissions are granted by the Financial Conduct Authority (FCA) and/or the Prudential Regulation Authority (PRA) under Part IV of the Financial Services and Markets Act (FSMA 2000).

80
Q

What’s Passporting

A

Passporting
The method by which firms authorised in one
European Union (EU) member state are - under the Markets in Financial Instruments Directive (MiFID) - permitted to carry on regulated financial services activities in another state without the need to become fully authorised in that other state.

81
Q

What’s Placement

A

Placement
The first stage of money laundering, in which money is introduced into the financial system.

82
Q

What’s Principles for Businesses

A

11 key principles established by the FCA which must be observed by authorised firms. These principles are detailed in the FCA’s Handbook.

83
Q

What’s Proceeds of Crime Act (POCA) 2002

A

Proceeds of Crime Act (POCA) 2002
Legislation which contains, among other things, anti-money laundering provisions.

84
Q

What’s the Product Intervention and Product Governance (PROD)

A

Product Intervention and Product Governance
(PROD)
A new Sourcebook created as a result of MiFID
II. This contains the requirements for firms in respect of product oversight and governance processes (the systems and controls firms have in place to design, approve, market and manage products throughout the products’ life cycle to ensure that they meet legal and regulatory requirements) and the CA’s use of the temporary product intervention rules.

85
Q

What’s the Prohibition Order

A

Prohibition Order
An order which may be exercised by the Financial Conduct Authority (FCA) under powers given to it under Section 56 of the Financial Services and Markets Act (FSMA 2000). Such an order prohibits the individual in connection with whom it is granted from carrying out particular controlled functions on the grounds that they are not fit and proper.

86
Q

What’s the Prudential Regulation Authority (PRA)

A

Prudential Regulation Authority (PRA)
The Prudential Regulation Authority (PRA), which is a subsidiary of the Bank of England, is responsible for the prudential regulation of financial firms, including banks, investment banks, building societies and insurance companies.

87
Q

What’s the Public Interest Disclosure Act (PIDA) 1998

A

Public Interest Disclosure Act (PIDA) 1998
An act which, among other things, provides protection for employees who, in good faith, disclose suspicions of wrongdoing within an organisation. See also Whistleblowing.

88
Q

What’s Recognised Clearing Houses (RCHs)

A

Recognised Clearing Houses (RCHs)
A term used to denote those clearing houses recognised by the Financial Conduct Authority
(FCA) as providing appropriate standards of protection in the provision of clearing and settlement facilities to certain markets. LCH.
Clearnet and Euroclear UK & Ireland are two examples of the five organisations granted this status.

89
Q

What’s the Recognised Investment Exchange (RIE)

A

Recognised Investment Exchange (RIE)
A term used to denote those UK exchanges which operate markets in investments, meeting certain standards set by the Financial Conduct Authority (FCA).

90
Q

What’s the Recognised Overseas Investment Exchange (ROIE)

A

Recognised Overseas Investment Exchange (ROIE)
An overseas exchange offering membership or providing facilities within the UK, and having been recognised by the Financial Conduct Authority (FCA) as meeting appropriate standards of investor protection.

91
Q

What’s the Regulated Activities

A

Regulated Activities
Activities for which authorisation from the Financial Conduct Authority (FCA) (or exemption from the need for that authorisation) is required.
Regulated activities are defined in relation both to the activities themselves, and to the investments to which they relate.

92
Q

What’s Regulatory Decisions Committee (RDC)

A

Regulatory Decisions Committee (RDC)
A committee of the Financial Conduct Authority
(FCA) which is responsible for disciplinary decisions.

93
Q

What’s Senior Manager Function (SMF)

A

Senior Manager Function (SMF)
This is part of the SM&CR. Individuals will be in a position where they direct/control and manage the firm’s business (on a day-to-day basis) and are responsible for the discharge of the firms.
Individuals will be approved by the regulator and held accountable in the event of issues arising.

94
Q

What’s Senior Managers & Certification Regime
(SM&CR)

A

Senior Managers & Certification Regime
(SM&CR)
The regime introduced by the PRA and the FCA to bring individual accountability to staff working in the banking industry. It has three parts to its regime - Senior Managers Regime, Certificate Regime and Conduct Rules. This regime will initially apply to relevant firms (UK-incorporated banks, building societies, credit unions and UK-incorporated investment firms which are regulated by the PRA and which have permission to deal as principal) and insurance companies.
It will also be rolled out to apply to all regulated firms by the end of 2019 - at which point ‘APER’ will cease to exist.

95
Q

What’s Significant Influence Functions (SIFs)

A

Significant Influence Functions (SIFs)
Certain functions carried out by directors and other senior personnel. In the Approved Persons Regime (APER), these comprise the governing functions, the required controlled functions, the systems and controls functions and the significant management functions.

96
Q

What’s Stabilisation

A

Stabilisation
The activity of supporting the price of a new issue of securities or bonds in order to minimise the volatility that can sometimes arise with new
issues.

97
Q

What’s Statements of Principle for approved persons

A

Statements of Principle for Approved Persons A set of principles established by the Financial Conduct Authority (FCA) with which approved persons are required to comply at all times.

98
Q

What’s Tax and Chancery Chamber of the Upper Tribunal (Upper Tribunal)

A

Tax and Chancery Chamber of the Upper Tribunal (Upper Tribunal)

The Upper Tribunal took over the role of the Financial Services and Markets Tribunal (FSMT) on 6 April 2010. It is independent of the Financial Conduct Authority (FCA) and is appointed by the government’s Ministry of Justice (formerly the Department of Constitutional Affairs).

99
Q

What’s Threshold Conditions (TCs)

A

Threshold Conditions (TCs)
The conditions which a firm must meet before the Financial Conduct Authority (FCA) will authorise or continue to authorise it.

100
Q

What’s Tipping Off

A

Tipping Off
An offence established under various pieces of anti-money laundering and terrorist financing legislation. It involves disclosing the fact that an investigation is, or is likely to be, under way, if that disclosure may imperil any such
investigation.

101
Q

What’s Training and Competence (T&C) Sourcebook

A

Training and Competence (T&C) Sourcebook
Part of the Business Standards block of the Financial Conduct Authority (CA) Handbook which sets out the CA’s requirements in connection with all staff (but especially in connection with people employed in controlled functions). The Sourcebook includes commitments which firms must make in connection with training and competence, including with regard to staff training, maintenance of competence, supervision and record-keeping.

102
Q

What’s the Treasury (HM Treasury)

A

Treasury (HM Treasury)
The government department that is responsible for formulating and implementing the government’s financial and economic policies.
Among other things this means that it is responsible for financial services regulation in the UK.

103
Q

What’s a Trust

A

Trust
A means of holding assets (legally owned by trustees) on behalf of underlying beneficial owners. Investment portfolios within a trust may be professionally managed, eg, charitable trust, unit trust. Governed by the Trustee Act 2000.

104
Q

What’s a Trustee

A

Trustee
A person or organisation who is the legal owner of assets held in trust for someone else. The trustee is responsible for safeguarding the assets, complying with the trust deed and (if the trust is a unit trust) overseeing the activities of the unit trust’s manager.

105
Q

What’s a Undertakings for Collective Investment in Transferable Securities (UCITS)

A

Undertakings for Collective Investment in Transferable Securities (UCITS)
A type of collective investment scheme (CIS) established under the UCITS Directives. These directives are intended to harmonise European Union (EU) member states’ laws so as to allow for the marketing of UCITS schemes across EU borders.

106
Q

What’s a Unit Trust

A

Unit Trust
A form of collective investment constituted under a trust deed. Unit trusts are open-ended investments; therefore, the underlying value of the assets is always directly represented by the total number of units issued, multiplied by the unit price, less the transaction or management fee charged and any other associated costs. Each fund has a specified investment objective to determine the management aims and limitations.

107
Q

What’s an Warrant

A

Warrant
An investment instrument giving the holder the right to buy a set number of the underlying equities at a predetermined price on specified dates, or at any time up to the end of a predetermined time period. Warrants are usually issued by companies or by securities houses.

108
Q

What’s Whistleblowing

A

Whistleblowing
The term used when an individual raises concerns over potential wrongdoing. The Public Interest Disclosure Act 1998 provides some statutory protections for whistleblowers.

UK Regulation and Professional Integrity (12 decks)

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